Homeowners and ratepayers are finding new ways to make and store their own electricity, some with a surprising partner, the energy companies themselves.
This new DIY movement means that we're approaching a time when people may start leaving the existing electric power grid, just as many people have switched from existing landlines strung from power poles to mobile phones in our pockets.
NRG Energy, which is the biggest power provider to U.S. utilities, is bypassing its utility customers and providing solar panels to homes and businesses. The company's CEO David Crane said recently that it soon will offer customers natural gas-fired generators to produce additional power at night.
Consumers are realizing "they don't need the power industry at all," Crane told Bloomberg News. "That is ultimately where big parts of the country go."
SolarCity is doing the same thing. It has about 50,000 customers across the country who have leases or purchased solar panels. It has also installed lithium-ion storage batteries (made by EV car maker Tesla) in about 300 California homes so that people can make power when the sun shines and run their lights and TV at night.
"There's a massive energy transformation that is occurring and it's super exciting," said SolarCity CEO Lyndon Rive in an interview with Discovery News. "Solar, combined with (power) storage, may be the next decentralization and in the end the consumer ends up with a better deal."
The amount of energy stored in the garage-based li-ion batteries isn't enough to run the entire home, but it can serve as a backup in case of a power outage. For homes in storm-ravaged areas, solar storage basically replaces diesel generators.
Some may choose to stay plugged into the grid, just as a back up.iStockPhoto
For most solar panel customers, the existing grid serves as a massive storage bin. The panels generate power during the day when the sun is shining, and sell any extra at any extra power back to power companies. The portion of power you get from solar depends on the electricity demand of your home, as well as the generating capacity (and sunshine) of the solar panels.
Rive says the benefit of using solar is a long-term locked in price for electricity, something that power companies can't guarantee.
"You do get electricity from your utility, but you don't know what you will pay 5 or 20 years later," Rive said. "When people get a solar system, they take ownership of getting their own electricity. They know exactly what their bill is going to be."
Rive sees a future in which people make more of their own power, but keep a connection to the local power company just in case something goes wrong.
But will people actually go "off the grid” completely? While it may work for folks living in remote areas, it doesn't make sense for most of us, according to Tom Kimbis, vice president for executive affairs at the Solar Energy Industries Association, a trade group in Washington, D.C.
"A lot of it will depend on how the grid evolves," Kimbis said. "If the grid can't adapt, you will see more people wanting to disconnect. But right now we rely heavily on the grid and I don't see that changing in the short term."
Kimbis noted that the nation's electric grid is become more flexible with the installation of so-called "smart meters" that can help pinpoint problems more quickly, re-direct bottlenecks and allow customers to know more about their own energy use.
As big utilities see the threat from startups like SolarCity, they too are considering ways to get on the solar bandwagon. Ohio-based AEP and Atlanta-based Southern Corp. are both considering a push into residential rooftop solar, while Virginia-based Dominion Power plans to spend $80 million to build 20 small rooftop solar plants in 2013 and 2014.