Solar to Reduce Utility Profits in Five Years, Fitch Says

[jpak]

http://www.bloomberg.com/news/2013-07-18/solar-to-reduce-utility-profits-in-five-years-fitch-says.html

Rooftop solar power and energy-efficiency programs will eat into utility revenue and profit margins and discourage investment in new transmission projects within five years, a Fitch Ratings analyst said.

Utilities in stagnant or low-growth markets in the Midwest and Northeast face the biggest losses as more businesses and homeowners install their own generation systems and upgrade to more efficient appliances, said Glen Grabelsky, Fitch’s managing director of utilities, power & gas. Retirees flocking to southern states may offset some losses for local utilities.

Utility revenue is increasingly threatened by technology that’s reducing demand for electricity from the grid, including solar panels, smart meters and software that shuts down operations when power prices spike. As some customers’ bills fall, state regulators will let utilities shift some of their fixed costs to other customers who don’t use solar panels, Grabelsky said today from New York.

“You can only burden the other customers to a certain degree,” Grabelsky said today in an interview. “For now it’s fairly negligible but in five years it will become noticeable. Each year the disparity will grow.”

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[AndyA]

1. Am I supposed to be concerned for the utilities?

Should I worry that the top executives might have to circumvent their plans for a new vacation house, yacht, foreign luxury car, or limit their travel in the corporate jet?

Why haven't the utility companies kept up with the times? Why aren't the diversifying into solar and wind themselves?

I'm sure they're just trying to figure out how they can screw their customers as much as possible over the next five years, before the axe falls on them.

[kestrel91316]

2. If they can't make profits anymore then they can just sell their assets and operations back to the

public so that utilities are non-profit like they should be.

[Nihil]

3. +1

It's a nice thought anyway ...