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Are utilities missing an opportunity?  No doubt, the landscape of how electricity is sourced is shifting – and it’s about time.  For decades electricity customers in industrialized nations have focused on renting electricity from the local utility. With stronger growth in residential and commercial PV deployment – than was previously envisioned – and with PV systems sized to serve a customer’s complete electricity needs, as well as the (still remote) possibility that storage will allow energy consumers to truly be independent of the grid, utilities are concerned about losing a reliable monthly revenue stream. Though there has certainly been decades of time to plan for a paradigm shift in utility business models, it is not too late for utilities to get ahead of the curve and build the distributed generation model of the future.  Instead of installing PV in remote areas miles away from the customer base and requiring expensive transmission builds and upgrades, why not lease customer rooftops? Put another way, why not partner with local neighborhoods and install the energy generating asset where it will do the most good.  It’s not that farfetched to envision a future where utilities partner with their residential and commercial customers to harness customer owned PV and sell the true commodity – electricity.  This model, which is essentially a version of the community solar idea, is common in the developing world where connection to the grid is not an option.  In off grid communities values such as cooperation and conservation are part of daily life and not considered sacrifices. 

Utilities should be encouraged to get ahead of the curve in this regard and test the viability of this model by choosing test neighborhoods, installing PV systems on cooperating customer roofs, arriving at a reasonable lease rate for the customer and then taking advantage of the fact that the PV generated electricity once fed into the grid is available to everyone in the utility’s territory. Result: utility ownership of a long term, DG, low maintenance energy generating asset, a closer relationship with electricity customers as well as participation in change – much better than playing catch up as change rushes by.

Ideally, this would take the solar lease model one step further, that is, involving utilities in changes that may happen with or without their involvement.  As long as the agreement between the utility concerning the monthly lease/rent is fair to both parties, and the costs relate directly to the true costs of managing a photovoltaic installation and do not have an arbitrary escalation cost built into the contract this is, as the business cliché goes, a win-win.  In Japan, Panasonic and energy management firm EPCO are launching a business at the end of January to sell aggregated (PV generated) electricity from residential roofs in advance of the potential liberalization of that country’s retail electricity market in 2016. It is too early to announce a successful result to this announcement, but it points to a forward direction for utilities, their customers and stakeholders everywhere – after all, these often disparate groups are partners whether they like it or not.