ORIGINAL REPORTING: How utilities and regulators see the future of New Energy

How utilities and regulators differ in their approaches to distributed energy; A new survey reveals key differences in how the groups view the growth of DERs

Herman K. Trabish, January 27, 2016 (Utility Dive)

Editor’s note: Since this piece was reported, regulators have begun seeing the importance of distributed energy resources.

With the federal tax break for solar now assured into the early 2020s, the business opportunity it presents to utilities has never seemed bigger. Most utilities are already signing power purchase agreements for central station solar, or are building it themselves. But are they missing out on an opportunity to grow solar on their customers’ rooftops? Or is that a poor value proposition for utilities and their ratepayers? The difference between the two solar segments will become clearer as the coming boom spurred by the tax credit extensions forces policy decisions about distributed solar, Senior Solar Analyst Cory Honeyman, lead author of GTM Research’s definitive U.S. Solar Market Insight Reports, told Utility Dive.

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“As debates veer off into complicated questions about net energy metering [NEM], Clean Power Plan compliance approaches, and the value of distributed solar in higher penetrations,” he said, the result will be a "more fractured landscape" that will offer companies with different competencies different opportunities. Utilities prepared to engage proactively in such policy debates may well find opportunities in the distributed solar space, analysts told Utility Dive, especially around the customer relationship. But whether rooftop solar becomes as popular as central station arrays for utilities looking to add generation — either by themselves or in partnerships with third parties —will depend on a number of factors, including cost differences between the solar sectors and mounting questions about the value of distributed generation… click here for more

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