Dive Brief:
- Utilities will not suffer mass customer defections to rooftop solar systems as feared, according to a new report by the American Council for an Energy-Efficient Future.
- The report, "The Future of the Utility Industry and the Role of Energy Efficiency," analyzes energy consumption projections up to 2040, finding that even an aggressive program of energy efficiency efforts and a large increase in distributed solar generation would only cause electric use to decrease by 10% from current levels.
- More likely, the report found, consumption will remain static or experience modest growth, necessitating new revenue sources besides power sales.
Dive Insight:
In response to "alarmists" who have heralded the rise of energy efficiency and distributed generation as the death knell for utilities, the report's authors argue "a 10% sales decline over 25 years is far lower than what would be required to initiate a death spiral."
With a flat rate of growth more likely, utilities have several options open to them. To recover lost profits from stagnating electric sales numbers, utilities need to consider switching their role to that of a "systems integrator," similar to recent initiatives proposed by state regulators in Hawaii and New York.
Utilities can remain profitable without selling more electricity by offering energy efficiency and distributed energy products and services to customers, said report co-author and ACEEE Executive Director Steve Nadel.
