$2 Billion Loss for Generators as a Million U.S. Roofs Get Solar
Rooftop solar is casting a $2 billion shadow over power generators across the eastern U.S.
With more than a million U.S. houses set to have solar panels by the end of next month, grid managers serving the eastern U.S. plan to cut the amount of electricity they buy from conventional plants by about 1,400 megawatts, starting in 2019, according to industry consultant ICF International Inc. That’s enough juice to power about 780,000 households.
The result could be as much as $2 billion in lost revenue for generators that are already reeling from lower demand, tight environmental regulation and depressed prices. Power producers including NRG Energy Inc. warn that the growing reliance on solar may curtail investment in conventional power plants, threatening the reliability of the U.S. electricity system. That’s already happened in Germany, they say, citing plans by EON SE and RWE AG to scrap existing or planned plants.
The decision “creates a risk you are going to repeat in the United States what’s happening in Germany,” said George Katsigiannakis, a principal at Fairfax, Virginia-based ICF, in a telephone interview. “The result of that is going to be that generating resources, reliable generating resources, don’t make their money and they retire.”