Utilities are under constant pressure to provision capacity to meet rising electric demand. If the on-premises Solar City model (front the cost of the system and installation in exchange for being able to sell the electricity produced) was proven they would be doing it. Building new generating capacity is hugely expensive and almost always a major political battle to get approved.
Many utilities are investing heavily in utility-scale solar and wind installations. But the reality is that on-premises solar is still a gamble. Nobody is yet making money at it, quite the contrary.
> If the on-premises Solar City model (front the cost of the system and installation in exchange for being able to sell the electricity produced) was proven they would be doing it.
No - this completely ignores the way the electric grid, generation, and distribution work. Just because 'utility solar' is more efficient for large scale generation, that doesn't mean it doesn't also make sense for individuals to be able to produce their own electricity.
My solar system has a break even point of 5.9 years - in another 3.4 years I will be pocketing several thousand dollars per year that would otherwise be going to PG&E. Doesn't sound like a gamble to me.
SolarCity's business model relies on net metering laws that effectively force the utility company to do all that distribution work for free and buy the solar energy for a higher-than-market price, all subsidized by other customers.
The question is, would you have had higher returns investing in a large-scale solar project?
I have achieved breakeven over buying some produce from the grocery store by growing it in my back yard, but that doesn't mean it's the future of agriculture. I guess it would help if the local Whole Foods were required to buy my excess lemons at the $1/each sticker price.
Growing your own produce is a net negative 'investment', even when you don't factor in the labor cost. On-premises solar starts making money after a few years (or today, depending on circumstances - I took out a subsidized loan to finance them, so no initial outlay, and had lower costs the day they were installed); centralized solar might make (a few percent) more but you can't leverage, you don't have control over anything (CEO 200% salary hike? 'sure', says the board, 'we're paying a 10% dividend aren't we? That's huge by industry standards!'), and you run the risk of losing everything (whereas solar panels are on your roof and unlikely to be a total loss).
So very different risk profiles, hence very different risk/reward trade-offs.
> The question is, would you have had higher returns investing in a large-scale solar project?
If you are lucky. If you are not, you've just invested in Solyndra (yes, I know they are manufacturer and not producer, doesn't matter). Local solar is much less risky.
You seem to be under an impression that utility companies are super-efficient, extremely innovative and unusually - for companies of their size - willing to try unproven business models (the whole solar-on-premise thing is pretty new). It is not exactly the case I think.
> he reality is that on-premises solar is still a gamble
It is. But that doesn't mean it is bad. It just means SolarCity will try it - and maybe become very rich doing it, or maybe will go bust - and if it works, in 20 years or so utilities will catch up. By that time it will be so regulated and red-taped that it would be hard for a small company to make it work anymore, so the utilities would fit right in.
No, they're under pressure to protect their coal supply line.
They know that they have to move to renewables soon and eventually coal power generation will be banned, so they're trying to burn as much of their stocks as they can before the stuff in the ground becomes worthless.
Many utilities are investing heavily in utility-scale solar and wind installations. But the reality is that on-premises solar is still a gamble. Nobody is yet making money at it, quite the contrary.