Dive Brief:
- Solar supporters say solar generation in the Southeast U.S. is being held back by the inability to properly finance solar systems.
- Currently, customers in Georgia, Florida, and North and South Carolina don't receive federal tax credits while third-party solar companies cannot help them finance solar installations and sell electricity to them at a fixed rate.
- When asked whether they have plans to create their own subsidiaries to own and lease solar systems to customers, big utilities in these states effectively said no—but that's an interesting question. State regulatory barriers and pushback from investors and the burgeoning solar leasing industry are to blame, according to observers.
Dive Insight:
The focus on rooftop solar means that the customers who generate their own electricity benefit, while customers that don't have it lose out as they pick up a greater share of the utility's grid costs.
Utilities don't plan to shift this model by building their own solar installations, something third party solar companies are glad about. If a utility entered the solar installation market, they would quickly dominate the competition, observers say.
Lawyer Stuart Broom, with Morris, Manning & Martin LLP, said utilities need to start thinking about making a solar play if they want to get out of the so-called "death spiral." But growing with solar is a balancing act: no utility wants to produce so much solar that its traditional power plants become unnecessary.
One traditional power company trying to change the status quo is NRG Energy, which bought a residential solar installation company last year. NRG Energy doesn't have the same worries over regulation as the Southeast's regulated utilities, making it easier for the company to adapt far faster to new trends in power generation.
