Tesla and SolarEdge are good to go, but SolarCity is going to get disrupted by TOU and the duck curve.
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just what happens to midday TOU after 2 more years of 40% growth of solar in SCTY's largest customer state?
http://www.caiso.com/Documents/Briefing_DuckCurve_CurrentSystemConditions-ISOPresentation-July2015.pdf
Nevada is small fries, moving Californian SCTY customers to TOU is going to be great for Tesla, but will gut SCTY like a fish, my prediction is that SCTY shareholders are going to be crying (diluted) big time, but the SCTY bondholders will be laughing
Actually, TOU pretty much solves the duck problem by pricing power more appropriately. Is there a risk that power prices will go too low midday because of solar? Under flat rate pricing there is because ordinary ratepayers do not have an incentive to increase consumption. But under TOU, all sorts of ratepayers will gladly use air conditioning more liberally or charge their car in the midday if retail rates really are lower. So in this way all ratepayers are clearly benefiting from solar.
How about the duck head, the early evening peak. Ratepayers will easily avoid charging their car or running the clothes drier at that time. They will also cool their home earlier in the day instead of waiting till they get home to run the AC. Potential solar customers with west facing roofs will also be motivated to install panels, whereas under flat rates they had less motivation to do so.
So right off the bat, the answer to the duck curve is TOU. First, everyone can avail themselves of a little demand management, whether using fancy technology or common sense. Second, batteries and west facing panels can bring additional hardware to smooth things out. Specifically batteries will reduce solar export to the grid when midday prices are too low and reduce imports at the peaks.
If it is a zero sum game, who are the losers? Power producers are. Peak power plants are getting much smaller peaks to server. Baseload plants are particularly hit by low midday prices. That makes baseload unprofitable midday and midnight, leaving very little left to serve. So to the extent that TOU supports even net demand across the day, this would be of benefit to baseload at the expense of peak load. But longer term, TOU support even greater penetration of distributed solar which gets us to the place where baseload demand is disrupted.
The winner in all this is the consumer. When proper price signals reach consumers, demand can adjust appropriately and drive the whole market to greater economic efficiencies. Solar, storage and demand management are important contributors to that economic efficiency. Batteries can do a tremendous job in squeezing out inefficiencies and balancing supply and demand throughout the day. But the amount of storage that comes into service of this market will depend on how well the market compensates storage. A fairly mild TOU pricing scheme might not create big enough price spreads to compensate storage. Real time exposure to actual price changes in the wholesale market would go much further. Other schemes where storage is paid for standby capacity and other aggregated grid services may be needed to attract enough investment in storage. Such schemes may be thought of as subsidies and resented as such, but if the batteries are being called upon to provide grid services of genuine value, then it is simple compensation for service, and all ratepayers are the beneficiary of those services provided.
So in all this I see nothing threatening to rooftop solar. What I see are opportunities for solar, batteries and demand management to have an even bigger impact to the benefit of all ratepayers.
