November 4, 2010 source: getsolar.com
The concept of a smart grid looks pretty good on its face – and upgrading the grid would definitely pay dividends for utilities and energy consumers alike. However, there are some potential pitfalls – as illustrated by a discussion at the VentureBeat GreenBeat 2010 conference this week.
A smart grid could boost distributed, localized solar power generation by rewarding homeowners who install solar panels on their homes and feed the energy back into the grid. However, if this strategy becomes popular enough, there could be some unintended consequences.
As Nat Goldhaber, the managing director of renewable venture capital fund Claremont Creek Ventures, pointed out, “every house that goes off the grid is no longer somebody who the utility can charge.”
Too many homes turning to renewable energy solutions and using the smart grid to their advantage means “the price of electricity has got to rise for all those who will not have solar. So in the end, the poor are going to pay the bill of keeping utilities alive.”
On the flip side, however, the rising cost of energy would create new incentives for utilities and individuals to invest in solar. In the shorter term, utilities and governments should make sure that smart grid initiatives are intelligently applied so that solar adoption doesn't end up transferring costs to those still unable to afford it.