Comment Re: Are they really that scared? (Score 4, Insightful) 461
Electric companies have a huge investment in their current physical plant.
Any plant built in the last 10 years won't be paid off for another 10 to 20 years.
Solar and wind power combined with durable, inexpensive batteries has the potential to be "cheap enough" that people will avoid electrical companies and the "network effect" that benefits them will be lost.
You see it with AT&T now. When everyone had a landline, prices were lower. As fewer people have a landline, the per customer cost of maintaining the physical lines goes up.
I.e. if the fixed cost of serving an area is 1 million a year (for workers and materials) (either electrical or telephone) and 100,000 people in the area use your service, the cost per customer is $10. Your utility bill is $50 in the winter and $150 in the summer. If that drops to 50,000 customers- the fixed cost is up to $20. If that drops to 25,000 customers- the fixed cost is up to $40.
Where you "rolled in" the fixed cost before-- now you either need to raise rates or raise your fixed cost.
But as your rates increase to $90 in the winter and $180 in the summer-- it makes more sense for people to go to solar and wind power. As you drop to 10,000 customers in the same geographical area-- you are up to $100 per customer in fixed costs and now the monthly bill is $150 to $250 and it really makes sense to go to solar.
add to that the fact that solar has dropped from 10x the cost of generated power to 4x the cost of generated power in about the last 12 years alone and the future trend is solar power fundamentally cheaper than generated power. Plus there is already 2x cost solar panels-- it's just that germany has bought current and future production two years out for their industrial scale solar plants.
And yes- electrical utilities are starting to lobby very hard against solar. Removing subsidies, adding costs, adding regulations to make it more expensive to go solar, and altering laws so they can break out the fixed cost so grid tied solar customers will pay their full share of the fixed costs (which are currently partially held in the variable rates).