SEPA Report Examines Utility Business Models

The Solar Electric Power Association (SEPA) has released the second phase of its Utility Solar Business Models (USBM) report, entitled ‘Utility Solar Business Models: Developing Value in Solar Markets.’ The report provides a look at the business models of 21 utilities that have integrated solar energy into their energy portfolios.

The USBM report examines variants among utility business models, including the following:

  • Pursuing both utility ownership and power purchase agreements (PPAs);
  • Standardizing bidding and PPAs to minimize transaction costs and regulatory review;
  • Aggregating, integrating and controlling systems to reduce host and developer costs;
  • Integrating distributed solar with local smart grid initiatives;
  • Compensating host customers with lease payments or long-term fixed energy rates;
  • Targeting underutilized properties, multiple site owners and public rights of way; and
  • Targeting local capacity constraints using tracking systems.

Overall, the report concludes that new, expanding definitions of utility solar business models represent a significant potential for solar market growth. The lessons learned from the models developed by utilities such as Tucson Electric Power, Sacramento Municipal Utility District, and Florida Power and Light can be applied to utilities across the country looking to develop solar power.

The study also identifies four challenge areas that may influence the growth of utility-scale solar as the market matures: solar ownership, solar value, competitive issues and stakeholder impacts.

The full report is available here.

SOURCE: Solar Electric Power Association

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