«Everyone talks about
the utility death spiral but it is largely exaggerated,» Hauser said.
Nevertheless, the Center for American Progress analysis reports that many utilities see in their future the ominous - sounding «
utility death spiral.»
One of the latest mainstream developments is that Solar City is teaming up with Tesla motors and will be providing lithium battery packs with all their solar installation: So starts the centralized
utility death spiral.
Rooftop solar was never likely to lead to a «
utility death spiral,» as its detractors often argued.
The threat, often referred to as the «
utility death spiral,» goes like this: as customers choose to install solar panels or adopt energy efficiency measures, a utility will sell fewer units of energy and has to increase what it charges for electricity to ensure that it can still cover its fixed costs, such as grid maintenance and labor.
Not exact matches
The traditional
utilities model is in a
death spiral, with power plants being replaced by technology - enabled, customer - centric innovations.
The LBNL study — which models the effect of various policies on distributed solar deployment — does contain one bit of good news for
utilities: The
death spiral isn't inevitable.
The reality of stranded assets has since been documented to serve as a reminder for investors, eg the decline of the US coal mining sector, the
death spiral of EU
utilities.
The central lesson for
utilities in the talk of a
death spiral is if they don't give their customers what they want, they go elsewhere.