As solar PV expands into new markets and regulatory environments in U.S., 21st century technology is colliding with institutional structures that have remained relatively unchanged since the 20th century. Many existing electric utility business models, which have evolved on the basis of control, ownership and scale efficiencies from central station electrical supply, transmission, and distribution, are poorly adapted to quantify, capture or optimize the value streams associated with distributed energy resources. In this environment, incumbent utilities often associate distributed PV with increased transaction costs, challenges to system operations, and revenue loss.
Meanwhile, while supportive federal, state, and local policies, including tax benefits, renewable energy credits (REC) sales, and net-energy metering (NEM) have spurred solar PV growth in many U.S. markets over the last decade, these policies are designed for early market support in an emerging technology, not a long-term market solution. As solar costs decline to SunShot targets and penetration rates grow, policies, such as net-metering, threaten conflict among stakeholders. While some customers may not be paying “their fair share” of the services they receive to the grid, others may not be receiving the value of the power they're supplying. These conflicts could pose significant barriers to long-term growth of customer and community-sited solar PV.