The ‘situationship’ of the solar industry and electric utilities

In the ten-plus years that I’ve been in the solar energy industry, the general sentiment has been to avoid antagonizing electric utilities because we need them as partners for our very survival. Due to this mindset, many solar companies don’t call out electric utilities as direct competitors or question their monopoly status.

In fact, the solar industry has spent precious time and financial resources developing technologies that ensure solar is a value-add for the business model of electric utilities, such as virtual power plants (VPPS), battery coupling, monitoring and control platforms, and demand-side management technology.

This strategy has worked. The solar industry has been incredibly successful at courting electric utilities with this messaging, technology, and especially its reduced LCOE. Electric utilities have begun to embrace solar energy at rapid rates.

Growing solar and electric utilities’ relationship

According to SEIA and Wood Mackenzie, solar has been the largest percentage of new electric generation capacity since 2019, and in Q1 of 2023 it was more than 50% of new electric generation.

In the same report, SEIA and Wood Mackenzie forecasted significantly stronger solar installation growth in the utility sector as compared to distributed generation. From 2022 to 2028, it is forecasted that utility solar will grow from about 60% share of capacity in the U.S. to about 75%. And this trend isn’t happening by chance.

SEIA Wood Mackenzie 2023 solar stats
SEIA Wood Mackenzie 2023 solar stats

Electric utilities aren’t just welcoming solar, they are claiming solar only for themselves. Utilities are trying to declare all the profits and benefits of solar, including tax incentives, while also preventing their customers from gaining access to the same. Utilities are trying to block distributed generation in order to maintain their top-down power structure by:

  • Asking regulators to raise fixed monthly charges,
  • Weakening NEM incentives,
  • Requesting rate increases to pay for their own electrification initiatives.

The utility duck swerve

The attacks on NEM in California were never about finding a solution to the duck curve and ramp up times. If they were, then utilities would have deployed large batteries, created distributed battery incentives (like lease programs), or turned to innovation. Instead, they leveraged an age-old tactic that has always worked for their monopolistic business model – lobbying to raise rates. The duck curve was always an excuse for utilities to limit distributed generation.

While the solar industry has been trying to be a peace maker with electric utilities, the utilities have been simultaneously labeling solar a nuisance while actively deploying front of the meter solar systems themselves. This dynamic has put the solar industry on edge and unsure how to respond. Maybe it’s time that the solar industry realizes it has more power in this relationship than it realizes.


Jessica Fishman, Director of Renewables at Kiterocket, is a strategic marketing leader with nearly 20 years’ experience, including seven years as head of global public and media relations at inverter maker SolarEdge. Passionate about addressing climate change by accelerating the clean energy transition, she has worked at leading renewables companies, building marketing and communications departments.

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