Utilities to lose $2B to rooftop panels in 2019

Source: E&E • Posted: Wednesday, March 23, 2016

Conventional power plant operators are set to lose $2 billion in annual revenue starting in 2019 as increasing residential solar panel installations decrease grid demand.

More than a million U.S. homes will have solar panels by the end of April, and grid managers are responding to this by planning to purchase 1,400 fewer megawatts from power plants by 2019, according to consultancy ICF International Inc.

The plan “creates a risk you are going to repeat in the United States what’s happening in Germany,” said George Katsigiannakis with ICF. “The result of that is going to be that generating resources — reliable generating resources — don’t make their money and they retire.”

In Germany, the plan to shift the country to more renewable energy use, called the Energiewende, has resulted in moves to close two gas-fired plants and to cancel construction of a coal-fired plant.

If eastern U.S. grid operators are allowed “to suppress prices below economically sustainable levels, the region will experience premature resource retirement and the inability to attract new” plants, said Abe Silverman, a lawyer with NRG Energy Inc. (Jonathan N. Crawford, Bloomberg, March 15). — BTP