Solar Rooftop; A disruptive challenge to electric utilities.

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The declining trend in Solar PV has made rooftop solar PV affordable which pose a threat to electric utilities as their profit margin will be effected. While solar is being promoted through various polices such as Accelerated Depreciation(AD),RPO (Renewable Purchase Obligation), and Net metering which attracts residential and rooftop owners to shift towards the low cost electricity. The shift of consumers from a centralized utility service model to decentralized electricity generation model pose a threat to electric utilities as they will be left with only low paying agriculture consumers. On one side the cross subsidy charged from high paying consumers  lost, at the same time the reduced electricity sales create risk to their grid viability.

We can compare the situation with Telecom sector where many dominating telecom monopolies lost their existence due to advent of new technology and the original copper wire phone network became wireless dominated by internet technologies. However we cannot ignore the existence of wired utility grid for electricity industry. So, while telecom example is a tale of responding to the threat of obsolescence, the real time challenge to electric sector is to provide a proper tariff design and allow the revenue requirements which address the existence of a service utility meant for   transporting electricity and not for sale of electricity as in their erst while business model.

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