Distributed Solar Thrives Online In Deregulated Electricity Markets

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Written by Nora Caley
on June 04, 2014 No Comments
Categories : E-Features

Consumers can comparison shop online for everything from flights and hotels to clothing and books. In some states, people can also compare prices among electricity providers. In these deregulated markets, ratepayers' ability to shop and compare energy companies might help the growth of distributed solar.

According to the U.S. Energy Information Administration, the states that have deregulation and retail choice for electricity are Connecticut, Delaware, Illinois, Maryland, Maine, Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas and Washington, D.C.

Some of the states' public utilities commissions have set up websites that allow people to compares prices and in some cases even shop for solar power suppliers. For example, the Texas Public Utility Commission has its Power to Choose website that allows users to input a zip code, then view the providers' offerings by price, contract length and other factors. Power to Choose also offers information for homeowners who want to install distributed generation, and has a list of companies that offer buy-back programs for excess energy. The Pennsylvania Public Utility Commission's Power to Switch site offers a similar shopping experience.
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A online energy marketplaces may encourage a homeowner to think more about solar. Other efforts that can benefit solar while helping consumers choose a provider include private companies such as San Francisco-based Choose Energy.

The company launched in 2008 as an energy provider. Consumers in Texas, where the company was then based, could go online and compare prices for natural gas suppliers and electricity suppliers. In 2012, Choose Energy expanded into deregulated northeastern states, including Massachusetts and New Jersey. Tough says many ratepayers were specifically interested in solar power options.

‘People started asking for solar, and that surprised us,’ says John Tough, head of operations and business development for Choose Energy. ‘They said, 'Hey, I've heard a lot about solar; is it right for me?'’

The website now includes solar among the energy choices. Users can type in their zip code and then select from a chart that includes electricity, natural gas and solar. If they click on ‘solar,’ they fill out an online form to get a quote. Based on the information on that form, Choose Energy can use satellite imagery to see the house and which way the roof faces. The company can also figure out which electricity provider the homeowner is currently using, the square footage of the home, the tax incentives in the area and the customer's usual consumption.

‘I envision solar being a large part of our business,’ Tough says.

Choose Energy is available in 11 deregulated states: Connecticut, Illinois, Maine, Maryland, Massachusetts, Michigan, New Jersey, New York, Ohio, Pennsylvania and Texas.
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Pure Energies represents a solar-only variation on the online energy marketplace. Potential customers sign up online to become members. A representative from Pure Energies uses satellite imagery to evaluate the house for its solar potential.

Chris Stern, vice president and co-founder of Pure Energies, says online electricity marketplaces are a sign of change in the power industry. ‘We are working on integrating with large utilities to become part of the power bill,’ he says. ‘Most of the people providing solar leases are not utilities. I think the eventual marriage between the two will happen.’

In May, Choose Energy established a partnership with OneRoof Energy Inc., a residential solar services provider. The online marketplace will add the designer/installer to its renewable energy portfolio.

David Field, CEO of San Diego-based OneRoof Energy, says the online marketplace reflects another trend besides the desire to make purchase decisions on a website. ‘The energy business is moving like the telecommunications business,’ he says. ‘When AT&T sells you services, they will try to sell you voice, data – you name it. It's bundled.’

Field thinks there will be more bundling in the energy business. ‘When you install solar on a residence, you offset two thirds of demand, on average,’ he says. ‘In deregulated markets, it makes sense to bundle up the rest of the power and give them one package.’

He explains that OneRoof manages the solar portion of the bundle, and Choose Energy manages the remaining portion. The bundling reflects a larger trend, Field says. ‘Smaller tech-centric companies are playing toe-to-toe with utilities, and we are using solar to do so,’ he says. ‘We are seeing a transformation in the market, being led by upstart companies.’

Pure Energies' Stern also sees comparisons with the telecom industry. The grid can be compared to the 1980s phone conglomerate that had a monopoly on the landline business and did not exactly adapt quickly to new technologies or competition. Today, there are much smaller telecommunications companies, and most households have more than one cell phone.

‘When the day comes that we have low-cost energy storage, the grid will basically disappear,’ Stern says. ‘It will be worse than the telecom industry. Utilities are Ma Bell. They really can't change.’


Nora Caley is a freelance writer based in Denver.

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