If a good indicator of grid parity is articles about grid parity, then grid parity seems to be here. This article from Renewable Energy World has a good roundup of recent articles on grid parity and the possibly dire consequences for traditional utilities.
- January 2013, Edison Electric Institute, “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business.”
- October 2013, Citibank, “Energy Darwinism: The Evolution of the Energy Industry.”
- December 2013, The Wall Street Journal, Lights Flicker for Utilities.
- February 2014, The Rocky Mountain Institute, “The Economics of Grid Defection.”
- March 2014, Morgan Stanley, tipping point is near report (original unavailable on company website as of April 8, 2014).
- April 2014, McKinsey and Company, “The disruptive potential of solar power.”
And yet the thesis of the Renewable Energy World article seems to be that all this is overblown. Their main argument is just that people won’t switch because they are stubborn. I don’t buy that. I agree that people are not just economic robots who will do cost-benefit analysis and switch instantly, but if the economics is pushing them off the grid then resistance will gradually fade, until one day it will be a landslide. The one thing I think could slow it down would be reliability. It might be annoying and even dangerous if your entire house is giving you a “low battery” signal. Sure, you could keep a diesel generator around. But that involves storing diesel fuel. It would make more sense to just keep a backup battery. But every once in a while, that backup battery might not be enough, so you might need a second backup battery, and so on. Neighbors or whole towns could share a backup system, but then you would be starting to build a grid again. You could have a natural gas generator, but then you need to be on a natural gas grid, and if I had to choose between the electric grid and the latter I would rather go electric.
We can take it as a good sign or a bad sign that traditional utilities are starting to fight back through lobbying and through the courts. They are trying to get states (examples: Florida, Virginia, South Carolina, even Pennsylvania, ) to outlaw or limit selling energy back to the grid, on the grounds that the customers who don’t do it will then have to pay more. This is true as far as it goes – if all but a few people go off the grid, the ones who are left will be stuck paying for the entire traditional system, which doesn’t work. So as a society we can probably afford to support some early adopters, but once it really starts to catch on it’s all or nothing. Lobbying and buying off politicians might slow the tide for awhile but not forever if the forces pushing us in this direction are strong enough. The traditional utilities can either find a way to get in on the game or die.