Here's the Biggest Risk With Tesla's Gigafactory

[kristopher]

13. "Utility in a Box" or "The Economics of Grid Defection"

The Economics of Grid Defection

Distributed electricity generation, especially solar PV, is rapidly spreading and getting much cheaper. Distributed electricity storage is doing the same, thanks largely to mass production of batteries for electric vehicles. Solar power is already starting to erode some utilities’ sales and revenues.

But what happens when solar and batteries join forces? Together they can make the electric grid optional for many customers—without compromising reliability and increasingly at prices cheaper than utility retail electricity. Equipped with a solar-plus-battery system, customers can take or leave traditional utility service with what amounts to a “utility in a box.”

This “utility in a box” represents a fundamentally different challenge for utilities. Whereas other technologies, including solar PV and other distributed resources without storage, net metering, and energy efficiency still require some degree of grid dependence, solar-plus-batteries enable customers to cut the cord to their utility entirely.



This first installment of two reports outlines the possible scenarios in five different U.S. regions—Hawaii, California, Kentucky, Texas and New York—and identifies when solar PV and storage combinations could disrupt existing utility business models. The continuing decline of solar PV and battery storage costs, coupled with increasing retail electricity prices, has resulted in grid parity today for commercial customers in Hawaii. The most optimistic projections, based on certain solar and efficiency targets being met, depict grid parity for millions of residential and commercial customers in New York and California within this decade....

You can download the full report or a summary at http://www.rmi.org/electricity_grid_defection