- A photovoltaic (solar) panel is seen next to solar battery memory system ‘IBC SolStore 6.3 Li’ in the IBC Solar headquarters in Bad Staffelstein
(Reuters) – Every new solar panel installed on European rooftops chips away at power utilities’ centralized production model. Unless they reinvent themselves soon, these giants risk becoming the dinosaurs of the energy market.
The industry faces drastic change as renewable energy turns consumers into producers and hollows out the dominance of utilities. With their stocks at decade lows and a millstone of debt around their necks, Europe’s utilities have little margin for error.
It is no longer just renewables sites like CleanTechnica that are talking about renewables’ effect on the current electric industry paradigm. The Reuters piece talks about the growth of renewables and documents utilities’ complete failure in dealing with it. And, of course, the results are in the utility share prices, down 65% since 2008 for a eurozone-only utilities index.
We all know how hard it is for an organization to change its focus and its culture; the larger the organization, the harder it is to change. German utilities, especially, can be forgiven for not understanding the nature of what they were facing. This will be less true for U.S. utilities that not only have the German experience to refer to, but the Australian and Hawaiian ones as well. (Not to mention the newspaper industry: Clay Christensen, newspapers and the cliff of despair.)
While denial is an option, it does not appear to be a viable plan. See Disruption On All Sides – What Is A Utility To Do?, Residential Rooftop Solar Disruption, and Solar energy companies upset over Idaho Power proposal. Many U.S. utilities have a surprisingly short window to start to turn around their focus and culture. They need to begin now.