While many utility executives attribute much of their predicted market challenges to the rise of photovoltaics and net metering, they actually have much more to worry about.
In a 2013 survey of global utility companies by PricewaterhouseCoopers, the results revealed that the utility industry leaders anticipate major changes to their business model in the near future. Ninety-four percent of international industry representatives surveyed predict that the power utility business model will be either completely transformed or significantly changed between today and 2030, while only 6 percent expect that the utility business model will stay “more or less the same.”
In North America, 40 percent of respondents believed that utility companies’ means of making a profit will see major changes over the next two decades. A strong majority — 82 percent — of North American respondents also said future energy needs will be met by a mix of traditional centralized generation and distributed generation, which feeds power from a mix of sources.
But while renewable on-site energy generation offers a major challenge to the electric utility business model, the lower capital cost energy efficiency approaches, will be the hardest hurdle. Not only because the initial capital costs are lower, the payback is faster, and the energy savings are huge. In fact just four effiency options can cut building electricity use by 50 percent, and there are many more options than what I cover here.