Weather Forecast


Economist warns that growth of solar will lead to problems for power companies

By Chuck Quirmbach

Wisconsin Public Radio

A Wisconsin economist says that as more people and corporations add solar panels to generate their own electricity, big power companies will have to adapt or face a death spiral.

States like Arizona and California are leading the country in solar energy growth, but Wisconsin has also seen an increase in solar. Some of the national increase is from homeowners using solar, but large corporations like Kohl's department stores are behind most of the push toward customer-generated renewables.

The change may be good news for the environment, but Steve Kihm at the Energy Center of Wisconsin, a nonprofit think tank, says it should cause shivers among utility CEOs.

“The fact that the Fortune 500 companies are starting to embrace this technology suggests that the threat here is going to be pretty big,” said Kihm.

Kihm said the effect on future ratepayers isn't clear. He said to some extent, the power companies will try to hit up its remaining customers to help pay for the power plants and other things already built.

“And so we might have two groups of people, at least initially, in which people taking advantage of solar are getting the good deals, leaving the people who either can’t or haven’t taken advantage of solar bearing more of the costs,” said Kihm.

Kihm said if the power generation competition gets intense, it could fundamentally change the utility and the service customers are getting. Kihm and a co-author suggest in a new paper published in the Energy Law Journal that one option state regulators should explore is letting the power companies sell other services, and related goods, like the solar panels.

A Madison Gas and Electric rate case going before the Public Service Commission later this year will begin to take a look at what's called “disruptive competition” for utilities.