SolarCity Stands Off With California Utilities Over Energy Future

Source: Thinkstock

Source: Thinkstock

SolarCity (NASDAQ:SCTY) has halted the process of installing and connecting solar systems which include batteries allowing power storage because California utility companies are unwilling to link the systems to the grid. It’s now been more than a year since the utilities started refusing grid connections to battery-connected solar systems.

The new systems, which SolarCity has been testing, contain batteries that retain energy generated by the photovoltaic solar panels and is stored for use when the sun isn’t shining. Adding storage capability to the solar energy systems makes customers much less reliant on the conventional electric energy grid on overcast days. It’s possible that utilities in California feel threatened by the newer systems and are thus reluctant to connect the systems to the grid.

SolarCity currently has about 500 interested customers in California, but just a dozen of those customers have battery systems that have been connected to the grid, according to a report by Gigaom.

ValueWalk reports that the California Public Utilities Commission has promoted a ruling to resolve the issue, but SolarCity says it’s tired of waiting around. “We’ve stopped submitting applications because we’ve lost faith that these things are actually going to be carried out in any reasonable time,” Will Craven, a spokesperson for SolarCity, told Bloomberg. “The ones we’ve submitted haven’t gone anywhere,” he added, saying that utilities require a series of different applications and fees, which makes the process of connecting the systems to the grid incredibly arduous. Application fees can run as high as $4,000 per customer, according to Gigaom.

“There’s a queue of customers in each IOU territory and until those queues move, we’re not going to submit $800 application fees for more customers to enter the queue. We fully intend to continue the program and interconnect all customers under contract, it’s just a matter of the utilities helping to facilitate,” Craven said, per Gigaom.

According to Gigaom, a Rocky Mountain Institute report suggests that the combination of solar panels and batteries has the potential to so transform American power usage that by 2030, huge chunks of the country could be completely off the grid, a shift that would inevitably lead to an erosion of customers and revenues  for utility companies.

Utility companies claim, however, that they support solar energy efforts, as well as new technologies, such as the batteries, that allow customers to rely less on the grid.

David Eisenhauer, a spokesperson for PG&E, says that it takes the company between eight to ten weeks to process applications, and that so far it has completed eight out of twenty applications its received from SolarCity. Eisenhauer claims that the lag is due to the fact that the batteries are a relatively new technology. “We’re still trying to find more efficiencies in processing the applications,” he added.

Regardless, batteries for solar electric systems aren’t going anywhere; electric car-maker Tesla announced in February that it plans to build a massive battery factory in the U.S., which could help cut the current cost of batteries by as much as 30 percent. Tesla has also said that it plans to sell some of those batteries to solar panel companies, while the rest will be used in its cars.

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