Mutian Energy is seeking approval from government regulators to develop a microgrid for new residential developments that are independent of existing energy companies.
For more than a century, governments have given energy companies a monopoly to sell electricity to homes and businesses, as long as governments agree to serve everyone and be subject to regulation.
But this simple device got more complicated when homeowners started installing solar panels and batteries. This has led to a fierce battle between utility companies and the relatively young solar companies that sell and install rooftop systems for homes and businesses.
On Thursday, Sunnova Energy, one of the largest U.S. solar panel companies, asked the California Public Utilities Commission to allow it to compete directly with investor-owned utilities to power homes in new residential complexes as private “micro-utilities.” . This is an illegal business model in most areas of the US.
The company said it would offer those residents electricity that was up to 20 percent cheaper than the rates charged by investor-owned utilities like Pacific Gas & Electric and Southern California Edison. The company said it would offer those residents electricity that was up to 20 percent cheaper than the rates charged by investor-owned utilities like Pacific Gas & Electric and Southern California Edison. Компания заявила, что будет предлагать этим жителям электроэнергию на 20 процентов дешевле, чем тарифы, взимаемые коммунальными предприятиями, принадлежащими инвесторам, такими как Pacific Gas & Electric и Southern California Edison. The company said it will offer electricity to these residents for 20 percent less than the rates charged by investor-owned utilities such as Pacific Gas & Electric and Southern California Edison. Компания заявила, что будет обеспечивать этих жителей электроэнергией на 20 процентов дешевле, чем взимают коммунальные предприятия, принадлежащие инвесторам, такие как Pacific Gas & Electric и Southern California Edison. The company said it will provide these residents with electricity for 20 percent less than investor-owned utilities such as Pacific Gas & Electric and Southern California Edison charge. If approved by regulators, microcommunications models, also known as microgrids, could disrupt the growth of these large utilities by denying them access to new homes or forcing them to cut rates to stay in business.
Sunnova executives say the approach they’re seeking approval is sanctioned by a nearly 20-year-old California law for resorts south of Lake Tahoe. In addition, the company says advances in solar and battery technology mean communities can be designed to generate enough electricity to meet their own needs at less cost than relying on the grid.
“If they don’t want to choose me, that should be their right; if they don’t want to choose you, that should be their right,” Sunnova CEO John Berger said.
As the cost of solar panels and batteries dropped, a handful of homeowners went offline. But doing so can be difficult or impossible. Some local governments have rejected building permits for off-grid housing, citing health and safety concerns, arguing that grid connection is necessary.
But connecting a home to the grid can cost tens or even hundreds of thousands of dollars, meaning off-grid systems can actually be cheaper — especially for sites in remote areas or where LAN is sufficient, major upgrades will be needed to serve more of the home. .
Off-grid installations are also attractive because once the system pays off, O&M costs often become modest and predictable, and utility rates can skyrocket. Electricity bills have skyrocketed in recent months due to soaring gas prices due to the war in Ukraine. According to the Energy Information Administration, in June the average retail price of electricity nationwide rose by 11% year on year.
But there are problems with the tiny utility that Sunnova hopes to create. Utopian visions of generating electricity where it is used often run into maintenance and other problems. Many of the small utilities that followed this model in the United States and Canada were later taken over by larger energy companies.
The Kirkwood mountain resort near Lake Tahoe in California has used micro-energy to power residents and visitors for many years. But the electricity it generates sometimes costs as much as 70 cents per kilowatt-hour, three to five times what the state’s major utilities charge. Eventually, the City of Kirkwood took over the utility and connected it to the national grid.
Sunnova’s approach to microgrids could suffer the same fate. But the cost of solar panels and batteries has plummeted over the past decade, leaving the power produced by the off-grid system cheaper than when the diesel system was built in Kirkwood.
Sunnova has applied to the state utility commission for permission to become a micro-utility company under the same state law as Kirkwood. Mr. Berger said his company will work with developers to install solar panels and batteries as part of housing developments in complexes with fewer than 2,000 housing units.
The company, which is backed by at least one major real estate developer, Lennar, said it would consider the Sunnova microgrid if approved by regulators.
“We are proud to partner with Sunnova and support high-profile players as they strive to solve some of the world’s most important problems,” said Lennar Executive Chairman Stuart Miller. “We value the current grid and are interested in new microgrid solutions that can complement and support traditional utility networks and help address reliability issues in extreme weather and peak demand.”
The Public Utilities Commission has said it will review Sunnova’s application and the process will include public comment. Representatives from the investor-owned utility said they could not comment on the proposal and needed more time to consider it.
Solar panels and batteries will be installed in common areas such as every home and club. According to Sunnova executives, all these devices will be combined into one set. The company expects such microgrids to experience outages of 30 minutes or less per year, compared to an average of two hours per year for large investor-owned utilities in California.
Consumers will receive a simplified electricity bill showing how much electricity the system produces at their own site, how much they use, and their net benefit or cost.
New homes and developments offer the most real opportunity for microgrids, as existing homes are often already served by investor-owned municipal or cooperative utilities.
Sunnova says its systems will not be fully isolated. He plans to connect them to the state’s larger grid to transfer excess power to other utilities or collect power in case of an emergency. But its systems would not be owned or operated by the three major power providers in the state — Pacific Gas & Electric, Southern California Edison or San Diego Gas & Electric. But its systems would not be owned or operated by the three major power providers in the state – Pacific Gas & Electric, Southern California Edison or San Diego Gas & Electric. Но его системы не будут принадлежать или эксплуатироваться тремя основными поставщиками электроэнергии в штате — Pacific Gas & Electric, Southern California Edison или San Diego Gas & Electric. But its systems will not be owned or operated by the state’s three major electricity providers – Pacific Gas & Electric, Southern California Edison or San Diego Gas & Electric. Но его системы не будут принадлежать трем основным поставщикам электроэнергии в штате — Pacific Gas & Electric, Southern California Edison или San Diego Gas & Electric — и не будут ими эксплуатироваться. But its systems will not be owned or operated by the state’s three main electricity providers – Pacific Gas & Electric, Southern California Edison, or San Diego Gas & Electric.
Based on the average California electricity bill in June, that would cut the typical California household’s electricity bill by as much as $60 a month, Sunnova said. Mr. Berger said the recent rise in interest rates is evidence of the superiority of Sunnova’s approach.
“People won’t get more and more energy bills every quarter,” he said. “Policy in this regard needs to change.”
The utility industry and its regulators, including the California Public Utilities Commission, have a vested interest in maintaining the status quo. These companies tend to be larger and more politically powerful than rooftop solar installers such as Sunnova or Sunrun, the nation’s largest rooftop solar installers.
Bernard McNamee is a former member of the Federal Energy Regulatory Commission, which oversees power lines, gas pipelines, and other parts of the energy industry. The traditional regulated utility monopoly model may seem outdated, he said, but it ensures that everyone, regardless of income, has access to a universally reliable network.
“We need to make sure the system is designed to provide reliable, affordable power for every client,” said Mr. McNamee, partner at law firm McGuireWoods. “People are throwing things all over the place with competition and markets. All of these things are complicated.”
But McNamee acknowledged that regulators need to figure out what to do with popular new technologies, like solar panels and battery systems, that could allow some homes or communities to generate enough electricity to function normally without drawing much of their energy off the grid. time.
“Regulators are trying to figure out how to integrate these new technologies,” Mr. McNamee said. “This is what we need to fight as a country, as a state.”
Utilities are calling on regulators to reduce the compensation homeowners receive for the excess solar energy their rooftop systems feed into the grid. The companies claim that customers with solar panels receive generous electricity credits, but they do not contribute enough to the cost of maintaining power lines and other network equipment.
The California Public Utilities Commission is expected to release a proposal for rooftop solar compensation shortly after it canceled an offer criticized by many companies and homeowners for being too beneficial to the utility.
Solar companies, which have grown rapidly in recent years, face their own challenges, not least trying to figure out how to stay profitable. Many of them rely on tax credits provided by the federal government to encourage the use of renewable energy. The Inflation Reduction Act recently signed into law by President Biden expanded and extended these credit lines.
The creation and operation of microgrids can provide a steady income for companies like Sunnova. This could fundamentally transform rooftop solar companies into the utility companies they have long opposed.