SolarCity Building Microgrids That Will Challenge UtilitiesChristopher Martin
SolarCity Corp., the biggest U.S. installer of rooftop solar systems that feed electricity to power companies, is now developing its own energy grids that may displace utilities.
The company is building so-called microgrids that use solar panels and batteries to run military bases, hospitals and remote communities, San Mateo-based SolarCity said in a statement Monday. They can function as either the sole power source or a backup to utility services.
Rooftop solar systems are a growing issue for utilities because customers who make their own electricity buy less from their local power companies. By expanding its service from single structures to campuses and communities, SolarCity is becoming a more significant threat to the utility business model.
“This is the way the electric grid will transform over the next couple decades,” said Peter Rive, SolarCity’s co-founder and chief technology officer. “It’s the culmination of everything we’ve been developing over the past five years.”
The company is already operating one system on an island, and Rive said microgrids are a blueprint for how consumers will produce more of their own electricity in the future.
SolarCity engineers will design and install the systems through its new GridLogic service. When connected to the grid, solar panels will charge batteries that can be used at night, reducing consumers’ purchases from the utility.
Microgrids that aren’t connected to a utility’s power network will have back-up diesel or natural gas generators that will kick in when supplies from the solar panels and the batteries run low. SolarCity will offer the systems through a long-term power-purchase agreement, similar to the solar leases that offer systems at little or no upfront cost to customers.
The company fell 1.8 percent to $47.53 at the close in New York. The shares have declined 11 percent this year.