Hinkle: Will you be selling electricity anytime soon?

Never underestimate the power of creative destruction — what economist Joseph Schumpeter called capitalism’s “essential fact.” The pages of history are littered with the skeletons of industries left behind by innovation.

Public utilities certainly are not underestimating it. As a recent Washington Post story put it, power company executives consider rooftop solar systems “a grave new threat” to the electricity industry.
In theory, the threat is simple: As more people get their energy from solar power arrays, the cost of the old system — all the generation plants and transmission lines and fuel and so on — will fall on a diminishing number of utility customers. Those customers will then have a rising financial incentive to go solar themselves, cutting the number of ratepayers even further, and so on — a death spiral for traditional utilities.

Scenarios like that lead to stories like this, from Forbes: ”Distributed Generation Poses Existential Threat to Utilities.” And this, from Business Week: “Why the U.S. Power Grid’s Days Are Numbered.” That article quotes David Crane, the CEO of the wholesale power company NRG Energy, who predicts that “utilities will continue to serve the elderly or the less fortunate, but the rest of the population moves on.”
Read full article at Richmond Times Dispatch