Ryan Stancil,
Editor
April 16, 2021
If you watch the energy sector, you know how much attention solar power has been getting in the past few years.
The adoption rate of solar panels for homes and businesses has been especially strong in California. The state has been leading efforts in adopting alternative energies in general. Over 44% of the state’s homes have solar panels installed and those panels generate around 22% of the state’s electricity.
It’s a trend that’s been accelerated not just because of falling solar costs, but state subsidies that have made them affordable for many owners.
It seemed like everyone was happy. People with solar panels on their homes got lower bills, emissions went down, and California got to brag that it was number one in adopting the technology.
But deploying solar panels worked a little too well in the eyes of some.
A recently proposed rule change would make it so that utilities could charge solar panel customers a monthly fee — a charge per kilowatt for grid access. The rule change also suggests that the amount homeowners make through net metering, the practice of paying solar panel owners for any electricity they send back to the grid, should be reduced.
These rules would apply to new solar users rather than people who already have panels in place. Still, it isn’t hard to imagine how these new rules would make potential new customers think twice about using the technology themselves.
This is coming at a time when the state plans for its grid to be fossil-free by 2045 and most new construction is required to have rooftop solar installation.
The argument that utilities are putting forward is that they are shouldering too much of the cost. They say the same of customers who don’t use solar power. They argue that the panels are mostly used by wealthier Californians who don’t need the credits. Advocates for solar say that many newer installations are instead going into more middle- and working-class neighborhoods.
Whatever the outcome from this ends up being, it’s sure to influence the rollout of solar technology in other states for years to come.
In the immediate future, however, it highlights the need for a different way to get power where it needs to go — not just in California... but throughout the entire country.
It’s one of the reasons why you’ll be hearing more about distributed power generation and virtual power plants in the next few years.
Virtual power plants are essentially decentralized networks of power-generating devices and consumers working together to supply electricity to the power grid. The decentralized nature of virtual power plants means that it’s easier to supply power even when conditions change, like in the case of a storm or a blackout.
Because this kind of setup does away with large power plants and utility companies, consumers pay less for the power they use and can sell the power they don’t need to use.
Control is put in the hands of the consumer. The essential service of power distribution is democratized in a way that you can’t get with power coming from a central power plant. That means improved standards of living as well as greater safety for consumers.
Think about the blackouts that happened in Texas earlier this year. Think about how often parts of California lose power because of wildfires. Think about how hard it can sometimes be for areas hit by disasters like tornadoes to get power back.
Virtual Power Plants can do a lot to make it easier to deal with these events, thus increasing safety and saving lives.
Companies that deal in this technology are mostly startups now. As the idea spreads here in the U.S. and overseas, they’re going to pick up attention from the kinds of big-money investors that help companies go from being unknown to becoming household names.
There’s one company in particular set to make its mark in this sector when the technology becomes more widespread. You can learn more about it right here in the pages of Daily Profit Cycle in the coming days.
Keep your eyes open,
Ryan Stancil
Editor, Daily Profit Cycle
Ryan Stancil is an editor and regular contributor to Daily Profit Cycle. He’s been active in the financial publishing industry for more than half a decade, offering insights and commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments. His readers appreciate his "tell it as it is" writing style, where he always offers a fresh new perspective on what's happening in the market and leaves nothing unsaid.