Dive Brief:

• SolarCity is seeking utility partners to develop ways to use the output of its distributed solar installations to smooth grid demand peaks and regulate system voltage, USA Today reports.
• The opportunity for such collaboration is expected to increase as solar-plus-storage technology, led by SolarCity partner Tesla Motors' gigawatt-scale battery manufacturing capability, becomes more economic and drives more installed capacity.
• Obstacles to such collaboration are the resistance of utilities to private sector-developed distributed solar, net energy metering policies that reward solar owners more for sending unused solar generation to the grid than for storing it, and regulatory regimes that reward utilities more readily for central station investments. But SolarCity reports some utilities are beginning to show interest.

Dive Insight:

Elon Musk's family of companies seem to be taking a more conciliatory tone toward the utility industry lately. At the annual trade show for the investor owned utility sector earlier this month, the Tesla CEO and SolarCity chairman told attendees that the future for power companies is bright, and that the increasing electrification of transportation would bring them reliable load growth for decades to come.

Now SolarCity CEO Lyndon Rive is courting the industry as well, telling USA Today the company is actively seeking partners for programs that would allow utilities to work with the installer to modernize their grids and use distributed resources more effectively to smooth out demand peaks and regulate voltage on their systems. 

SolarCity has seen interest in such a partnership from a rural co-op, Rive said, but any leads with big IOUs have gone cold so far. A utility trade group executive told USA Today that he hadn't heard of any collaborations being discussed at present, but would not rule one out. 

SunPower’s 2014 “Bridging the Divide: A Roadmap to Integrating Distributed Generation” proposed 8 principles for utility-distributed solar partnerships:

1. Innovate utility business models and regulatory frameworks for cost effective deployment of distributed technologies with new smart tools that improve grid performance.
2. Keep solar growing with net energy metering until penetration levels affect fixed cost recovery or impose distribution system investments.
3. When solar penetration rises, implement a gradual transition to rate structures that send price signals that improve grid efficiency, reliability, and resilience.
4. Develop transparent, predictable, and consistent rate structures that allow customers to adapt.
5. As a bridge, minimum monthly bills are preferable to fixed charges to ensure all customers contribute fairly to costs for the distribution system.
6. Customers’ rights to acquire, deploy, own, operate, and interconnect behind-the-meter technologies, including energy efficiency, storage, and clean generation, must be protected.
7. Interconnection of distributed generation should be streamlined with standards that protect system and personnel safety and reliability.
8. Distribution system operators should make public where grid upgrades and new resources will be cost effective and safe and reward those who relocate distributed generation accordingly.