Framing the Fight for Solar Differently: Utilities as the Big Bad Wolf
It's the classic David and Goliath story. The mighty, mighty fossil fuel companies piercing, scraping, and tearing apart the earth try to squash the teeny, tiny renewable energy companies determined to save the planet. With most simplifications it's far from accurate. Today, I wanted to address one inaccuracy in particular that I recently learned I had fallen victim too.
While discussing the challenges facing the solar industry in Spain with Piet Holtrop of Holtrop SLP, the person spearheading the legal charge against the Spanish government for retroactively cutting the FIT contracts, I learned that it wasn't the fossil fuel companies that solar power was fighting in Spain, but rather the utility companies.
In the narrative above the big bad wolves of the energy world are companies like Exxon Mobil. However, these companies often have little to do with solar power. I won't claim that they are benevolently in favor of solar power, but solar power doesn't directly compete with Exxon's business. Solar provides electricity for homes, while Exxon is concerned primarily with providing fuel for transport. Of course with the adoption of the electric car, there begins to be direct competition, but at least at this point in time the direct competition is minimal. The opposition to the adoption of solar power comes from the companies that have the most to lose - utility companies.
Mr. Holtrop explained something particularly insightful to me (although it probably sounds obvious to anyone reading this). The utility companies don't really care what technology they use, so long as customers are buying electricity from them. Ibedrola, the holding company for Spain's largest utility, is in fact one of largest producer of renewable energy in the world. Renewable energy does not scary Ibedrola and other utilities; people producing their own energy from the solar panels on their roof - that is what worries utility companies from Spain to the US.
On the home front, the Arizona Public Service recently admitted to funding non-profit groups that have air anti-solar advertisements in the run up to the vote over net metering in Arizona. An article by Greentech Media describes the announcement along with youtube videos of the anti-solar ad and Solar City's counter ad. The announcement by the APS includes a quotation by the spokesman of APS as saying, “We are in a political battle. We didn’t ask for it. But we are not going to lie down and get our heads kicked in. We are just not. We are obligated to fight. It is irresponsible to our customers not to fight back.”
The reason utilities feel threatened by residential solar power is because it reduces the revenues and undermines their monopoly position in the market.
This may not seem all that astounding to most people, but to me it offers a different perspective on the issue. It isn't idealogical. It isn't about renewable energy versus fossil fuels. It is about utility companies acting in their own self interest and the interest of their shareholders. It is not ideologies, it's business. Now of course, not all utilities are obstructive, but many felt to their own devices will strive to block the growth of solar power for residential users because it threatens their bottom line.
I believe the reason why I took more naive, idealogical perspective has to do with how the environmental movement frames the issue - as fossil fuel companies as the bad guys. Utility companies are just seen as the benevolent middlemen who supply our electricity. I believe this is because environmentalists are engaged in an idealist battle and the obvious opponent they construct is the nasty fossil fuels companies.
At first seeming utility companies as an opponent seems strange, but after a time I wondered why I didn't see it like this before.
While discussing the challenges facing the solar industry in Spain with Piet Holtrop of Holtrop SLP, the person spearheading the legal charge against the Spanish government for retroactively cutting the FIT contracts, I learned that it wasn't the fossil fuel companies that solar power was fighting in Spain, but rather the utility companies.
In the narrative above the big bad wolves of the energy world are companies like Exxon Mobil. However, these companies often have little to do with solar power. I won't claim that they are benevolently in favor of solar power, but solar power doesn't directly compete with Exxon's business. Solar provides electricity for homes, while Exxon is concerned primarily with providing fuel for transport. Of course with the adoption of the electric car, there begins to be direct competition, but at least at this point in time the direct competition is minimal. The opposition to the adoption of solar power comes from the companies that have the most to lose - utility companies.
Mr. Holtrop explained something particularly insightful to me (although it probably sounds obvious to anyone reading this). The utility companies don't really care what technology they use, so long as customers are buying electricity from them. Ibedrola, the holding company for Spain's largest utility, is in fact one of largest producer of renewable energy in the world. Renewable energy does not scary Ibedrola and other utilities; people producing their own energy from the solar panels on their roof - that is what worries utility companies from Spain to the US.
On the home front, the Arizona Public Service recently admitted to funding non-profit groups that have air anti-solar advertisements in the run up to the vote over net metering in Arizona. An article by Greentech Media describes the announcement along with youtube videos of the anti-solar ad and Solar City's counter ad. The announcement by the APS includes a quotation by the spokesman of APS as saying, “We are in a political battle. We didn’t ask for it. But we are not going to lie down and get our heads kicked in. We are just not. We are obligated to fight. It is irresponsible to our customers not to fight back.”
The reason utilities feel threatened by residential solar power is because it reduces the revenues and undermines their monopoly position in the market.
This may not seem all that astounding to most people, but to me it offers a different perspective on the issue. It isn't idealogical. It isn't about renewable energy versus fossil fuels. It is about utility companies acting in their own self interest and the interest of their shareholders. It is not ideologies, it's business. Now of course, not all utilities are obstructive, but many felt to their own devices will strive to block the growth of solar power for residential users because it threatens their bottom line.
I believe the reason why I took more naive, idealogical perspective has to do with how the environmental movement frames the issue - as fossil fuel companies as the bad guys. Utility companies are just seen as the benevolent middlemen who supply our electricity. I believe this is because environmentalists are engaged in an idealist battle and the obvious opponent they construct is the nasty fossil fuels companies.
At first seeming utility companies as an opponent seems strange, but after a time I wondered why I didn't see it like this before.
