Falling solar energy costs and non-competitive pricing threatens PG&E’s future.
“We’re an energy company. We install solar systems for free, and we sell the electricity at a lower rate than you can buy it from the utility. So given the option of paying more for dirty power or paying less for clean power, what would you take?” – Lyndon Rive, CEO, SolarCity
Make no mistake about it, solar competes with utilities for sales at the point of use. The customer decides, do I buy from the utility or from a solar company? SolarCity is clear about the competition.
Pacific Gas and Electric (PG&E) serves most of northern California, except for the sparsely populated Oregon border, the northern part of the Nevada border, small areas served by municipal utilities and the large municipal utility around Sacramento. It is the seventh largest investor-owned electric utility by market value, and number one in terms of number of retail customers.
PG&E’s marginal prices cannot compete with solar. Large residential customers pay 31¢-35¢/kWh, the same prices that cause the solar revolutions in Hawaii and Australia. Even worse, according to PG&E, “By 2022, PG&E’s top residential rate could reach 54 cents.” Residential customers represent about 40% of PG&E’s retail electric revenue.