Dive Summary:

• Solar power and energy-efficiency programs will significantly cut into utility profit margins and discourage new transmission projects within five years, forecasts Fitch Ratings analyst Glen Grabelsky.
• Utilities in low-growth markets in the Midwest and Northeast will face the biggest losses due to an increasing number of businesses and homeowners installing their own generation systems and efficient appliances.
• Utilities will struggle to change rate structures to invest in new projects and transmission systems. “It will have a negative impact on their ability to raise capital,” said Grabelsky, the managing director of utilities, power & gas at Fitch. “Regulators will ask, ‘Do you really need all that new transmission when there’s no demand growth?’ There’s the potential for stranding assets.”

From the article:
“Loss of demand from customers that go solar or reduce consumption in other ways will shift more and more grid costs onto customers that do nothing. Power supplied by U.S. utilities declined 3.4 percent last year, largely from energy efficiency and on-site solar generation, which reduces demand for electricity from the grid, Grabelsky said.”