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Report: Off-Grid May Soon Reach Tipping Point

Declining costs of solar power are making off-grid energy systems increasingly viable, getting closer to grid-parity with conventional sources of power from the electrical grid. Meanwhile, costs for big utilities are not declining, and as they begin to lose customers, their revenues will drop. According to a report from investment bank Morgan Stanley, solar systems with battery technology that allow consumers to leave the grid entirely will not only be able to compete with on-grid power, but the market may reach a tipping point at which people leave the grid at an accelerating rate.

Much has been written about the “utility death spiral,” but usually with an eye on customers installing solar and taking advantage of net metering policies by staying connected to the grid and selling back their excess power. Morgan Stanley’s report suggests that ratepayers may go beyond that and completely disconnect from the grid, a prospect that may occur far quicker than many once believed. Morgan Stanley studied several scenarios for the growth of solar, the most bullish of which finds that the “addressable” market for distributed solar could be 415 gigawatts within a few years. That dwarfs the current installed solar capacity of about 6.2 gigawatts.

Related Article:   Solar Power Threatening Future for U.S. Electric Utilities

Driven in part by Tesla’s announcement that it would build a new battery factory, the cost of batteries for home power storage could continue to decline. In “sun rich, rate high” areas of the United States, like Hawaii, the West, and the Southwest, off-grid solar systems will become as cheap or cheaper than grid power in five to eight years from now. Other estimates already put 10 states at grid-parity: Arizona, California, Connecticut, Hawaii, Nevada, New Hampshire, New Jersey, New Mexico, New York, and Vermont. The trend doesn’t bode well for the health of large utility companies.

By Joao Peixe of Oilprice.com



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  • David Hrivnak on April 01 2014 said:
    While I do believe there will be spectacular growth in solar I see very few people leaving the grid. Batteries at even 1/10 the cost are still very expensive compared to connecting to the grid.

    I have installed solar panels and now power my house and my electric car by them, or at least 90%. But for the long dark days of winter batteries I do not see batteries covering my needs. While days like today I gave a good 35 KWh back to the grid, there are many cloudy winter days when I need 60KWh. At a grid connection fee of $7.21/month I have no plants to go off grid.
  • Clint Brooks on March 27 2014 said:
    Never discount the power of the federal government to kill off an industries potential through legislation, fees, taxes, etc... The current administration has provided more than enough evidence of it's intent to destroy capitalism in this country and indeed is setting the stage for massive civil unrest due to high unemployment and progressively worsening rates of inflation caused by seemingly intentional destructive policies. This was a good article supporting a great idea but in an economic climate that will soon no longer exist.
  • ron graves on March 27 2014 said:
    Where are all the white vans across the country
    equipped to install solar systems and Brown's Gas
    devices? Where are the hydrogen pellet manufactures?
    When bio-engineered solar cells become commercialized
    the lower costs will encourage ground-up home designs incorporating solar electric independence. Good article-Thanks.

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