Report: Customers to leave utilities as grid parity nears for solar-storage
- As solar and energy storage prices fall, utilities in California and New York will likely see increasing customer defections as grid parity for commercial businesses could come in 2025 and 2031, respectively, according to a report. Parity has already arrived in Hawaii.
- The likelihood of favorable long-term customer defection signals the eventual demise of traditional utility regulatory models, the report said.
- Grid parity will take longer to reach for residential customers, the report said.
The report -- The Economics of Grid Defection -- from Rocky Mountain Institute (RMI), Homer Energy and CohnReznick Think Energy highlights the changes that are coming to the grid and gives a detailed look at the dreaded utility “death spiral.”
In one example, the report's base case shows solar-plus-batteries undercutting utility retail prices in the Southwest for the most expensive one-fifth of load served in 2024.
“While other distributed generation options still require some degree of grid dependence, solar-plus-storage provides an opportunity for customers to cut the cord to their utility entirely,” Jon Creyts, RMI managing director, said. “To remain competitive, utilities need to understand how to leverage hybrid systems within the electricity system.”
Rocky Mountain Institute: The Economics of Grid Defection