I'm curious what you mean with that statement. Which costs are they able to externalize by building grid scale solar that they'd have to cover out-of-pocket for a grid-scale rooftop solar deployment?
> Incentives aren't aligned between the utilities and their customers.
I mean, as a first approximation the utilities incentives are:
- keep capex and opex costs as low as possible
- while selling electricity at the prevailing rate inside their RTO
"Shorting The Grid" by Meredith Angwin paints an absolutely atrocious picture of the governance structures inside many RTOs and there are definitely perverse incentives at play, but fundamentally the utilities want to sell electricity while maximizing their margins.
I'm not even sure what the "customer incentives" are beyond paying as little as possible to keep their lights on and houses heated and cooled.
The biggest one is transmission. Most utilities have an arrangement where they can receive a certain return from customers with new capex. No large-scale transmission is required for rooftop installations.
Thanks for the book recommendation. I'll have to check it out.
> "customer incentives"
Correct. Customers are incentivized to use as little as possible and therefore save money. The utilities are incentivized to get customers to pay for new projects to earn a guaranteed return. And if a customer overgenerates their credits in a net metering scenario? Typically this is free energy to the utility. No payout.
Your comment assumes that the utility needs to be using up lots of land to power customers. Rooftop solar is far more efficient and there is no extra transmission required. Utilities don't need to consume vast tracts of land just to provide power to customers.
> retail price
Utilities in California (by law) already deduct fees out of this, so it's not reimbursed at full retail rate anyway under old NEM rules. There's also an absolutely massive gap between retail and wholesale rates that could be explored.