PG&E can’t survive solar energy

Pub date May 22, 2013
WriterTim Redmond
SectionPolitics Blog

Years ago, in the middle of the boom in nuclear power plants, we used to say, only half in jest, the private utilities would never accept solar energy because you can’t put a meter on the sun. Turns out that’s pretty close to true.

A new report by The Energy Collective argues that Pacific Gas and Electric Company may be the first utility in the country to go under — because of competition with cheap solar in sunny California. Once solar becomes competitive with PG&E, more and more customers will install panels, forcing PG&E to raise rates on the remaining customers, who will then have even more reason to go solar. The groundwork is already there:

PG&E’s marginal prices cannot compete with solar. Large residential customers pay 31¢-35¢/kWh [kilowatt-hour], the same prices that cause the solar revolutions in Hawaii and Australia. Even worse, according to PG&E, “By 2022, PG&E’s top residential rate could reach 54 cents.” Residential customers represent about 40 percent of PG&E’s retail electric revenue. Commercial customers experience high rates, too. Unlike residential customers, who need a commercial third party to own the solar panels to take advantage of the accelerated depreciation, commercial customers can keep that advantage for themselves, making solar more financially attractive. Commercial customers represent about 46 percent of PG&E’s retail electric revenue.

If it happens soon, it will happen here:

“There is nowhere else in the U.S. with the same confluence of events,” says Short: “High and rising marginal prices, good sunshine, and inability to respond to changed competitive circumstances. If ever an electric utility was set up to fall to solar, it is PG&E.”

This is a great argument for promoting CleanPowerSF (and a good explanation for why PG&E wants to kill it), and shows the need for an eventual municipal takeover of the grid, because even with widespread solar, there’s going to be a need to power to move around between generators and users at different times of the day. And if PG&E is headed for collapse, the city ought to be able to get the infrastructure cheap.