Rethinking the utility company as solar power heats up

JUDY WOODRUFF: Now: As the Trump administration
is considering whether to put tariffs on solar panels made outside the U.S., the rapidly
plummeting price of solar panels has led to a boom in rooftop installations and jobs. The solar industry now employs almost three
times as many people as the coal industry. This growth is also raising questions about
how utility companies should respond. William Brangham is back with this report
from Vermont. It is part of our occasional series of reports
Peril and Promise: The Challenge of Climate Change. It's also our weekly look at the Leading Edge
of science and technology. WILLIAM BRANGHAM: Andrea McMahon and her son
Caulder (ph) run a dog kennel and grooming business just outside Waterbury, Vermont. During the recent windstorm that knocked power
out for hundreds of thousands of people in the Northeast, the lights and blow dryers
stayed on at their business. That's because McMahon had just installed
these: two brand-new Tesla batteries connected to the solar panels on her roof.

All your neighbors were out of power, but
you weren't? ANDREA MCMAHON, Solar Customer: No. No. We — it worked. WILLIAM BRANGHAM: McMahon installed the panels
five years ago. In the summer, with its ample sun, they generate
more electricity than she can use, so the extra energy is sent to the local utility,
Green Mountain Power. ANDREA MCMAHON: And they credit our bill for
the winter, which we use up in the winter, because there's not quite as much solar working
in the winter. WILLIAM BRANGHAM: Right. ANDREA MCMAHON: But we basically have no electric
bill. And it's usually pretty big. WILLIAM BRANGHAM: No electric bill? ANDREA MCMAHON: No electric bill. WILLIAM BRANGHAM: You went from paying about
$200, $250 a month to now paying nothing? ANDREA MCMAHON: Right.

Yes. Nice, huh? WILLIAM BRANGHAM: The new batteries, which
she leases from Green Mountain Power for $30 a month, will allow McMahon to, in effect,
become her own personal power plant. She can operate independently from the grid
when power outages occur, and she can sell electricity back to the utility during peak
usage, even when the sun isn't shining. ANDREA MCMAHON: What we're not using here
is going over here to the grid. Kind of a win-win-win situation. WILLIAM BRANGHAM: Green Mountain Power CEO
Mary Powell also thinks it's a win-win. In fact, she's the driving force behind her
company's expanded push into solar and batteries and new energy technology. On the
day we met her, she was checking in with line men who were still at work restoring power
to customers. Powell likes to describe her company as an
un-utility. MARY POWELL, CEO, Green Mountain Power: One
of the things we really feel like we're in the business of doing here in Vermont is accelerating
what we believe is a consumer-led revolution to distributed resources and a completely
different model.

WILLIAM BRANGHAM: Powell calls existing utility
models grandpa's electric grid, powered in large part by coal, as well as natural gas,
hydro and nuclear power. Indeed, the bulk of Green Mountain's power
comes from such sources. But she says it's an inefficient system. MARY POWELL: On a good day, the system is
built for about 40 to like 43 percent economic efficiency. You have massive power-generating stations,
and you move energy over miles and miles and miles. You have substations that convert it down
to distribution level. You then have miles and miles of distribution
lines, and eventually you get to homes, businesses and communities. WILLIAM BRANGHAM: Powell's vision is to begin
to move away from that, to using a series of commercial and residential micro-grids
all over the state that can store and share power with each other.

A micro-grid is any small self-contained network,
like this housing community, where, if they get cut off from the main electrical supply,
they can generate enough electricity to meet all of their needs right here. This 14-unit development in Waltham, Vermont,
was built by industry and nonprofit groups in a first-of-its-kind experiment for low-income
housing. Each home has a six-kilowatt solar panel system
connected to a battery, so in the case of an outage, residents can power their homes
independently. And residents like Alexis LaBerge pay nothing
for electricity. ALEXIS LABERGE, Solar Customer: I wasn't quite
sure what to expect when they were like, oh, we're building some solar-powered housing,
and it's going to be energy-efficient.

And it's really reasonable. And, as a single parent, that's obviously
really important. (LAUGHTER) WILLIAM BRANGHAM: CEO Powell concedes that
it's easier to re-imagine a power system in a rural state like hers, with just 600,000
residents. But she's convinced that even more populous
cities and states need to change the way they think about energy delivery. MARY POWELL: I drive around different parts
of Brooklyn or Queens, and there are, you know, neighborhood after neighborhood where
you could be delivering absolute energy transformation services, lowering the energy costs of the
people that you serve, because you're looking at it from a total energy perspective. WILLIAM BRANGHAM: Fifteen miles south lies
another vision for changing energy delivery. Florida Power and Light, the largest utility
in Florida, is in the midst of a large-scale solar construction boom. This site was one of the first, built nine
years ago. The company now has six other sites, enough
to power about 60,000 homes. WILLIAM BRANGHAM: Kelly Fagan oversees the
solar construction. KELLY FAGAN, Florida Power and Light: We have
three plants we just commissioned at the end of last year. We have got four more behind that, and we
have four more the next year behind that.

WILLIAM BRANGHAM: Those utility scale arrays
will use more than 2.5 million solar panels to generate electricity for the grid, making
Florida 10th in the nation for solar generation. Even so, it will be a small fraction compared
to their nuclear and gas resources. Fagan says it's all about doing what's best
for its customers. KELLY FAGAN: If we go too far in solar, we
lose the reliability of our system. That's why we still need our gas plants and
our nuclear plants. They are the backbone of the system. They keep us running. They keep us going when the clouds are out,
when the rain is falling and when it's nighttime. SUSAN GLICKMAN, Southern Alliance For Clean
Energy: Historically, despite our nickname of the Sunshine State, Florida has really
lagged behind in adopting solar. WILLIAM BRANGHAM: Susan Glickman is a lobbyist
with Southern Alliance For Clean Energy, and she has been a loud critic of Florida's private

She applauds their recent solar building spree,
but thinks they game the system by continuing to build expensive conventional power plants. SUSAN GLICKMAN: Big monopoly utilities get
a guaranteed range of a rate of return on their capital expenditures. WILLIAM BRANGHAM: Meaning, if they build a
power plant, they're by law allowed to charge all you customers here in Florida to pay back
the cost of that? SUSAN GLICKMAN: That's right. Florida regulators will put that in the rate
base, and we will all pay for it. So, like a waiter in a restaurant where there's
a guaranteed tip, the more that is spent, if you buy dessert or you get a bottle of
wine, the more money they're going to make.

WILLIAM BRANGHAM: Glickman also says utility
companies have tried to put up roadblocks so that homeowners won't install their own
solar panels. She points out that the utility here spent
tens of millions of dollars backing a failed, and widely criticized, 2016 ballot measure
that would've curtailed individual solar projects. SUSAN GLICKMAN: They want to build power plants,
and too often they see rooftop solar as a threat to that business model. WILLIAM BRANGHAM: Florida Power and Light
says it doesn't discourage residential solar, but says it isn't very practical.

KELLY FAGAN: FPL is providing solar power
through our transmission grid at such a low cost, it's very difficult to put rooftop solar,
even on my own house. I have looked at it on my own house. The payback is not very good in Florida because
our bills are so low. WILLIAM BRANGHAM: So, you're arguing that
because you guys have provided a lower utility bill overall, that, on balance, it doesn't
make sense for people to do solar individually. KELLY FAGAN: Yes, that's correct. Financially, it just doesn't make sense. WILLIAM BRANGHAM: But that may be changing. Solar panels have dropped dramatically in
price, some 70 percent over the last seven years. When we visited Glickman, she was having panels
installed on her house, and she says she knows more and more people who are doing the same. SUSAN GLICKMAN: I do think there are some
people that want to go solar for environmental reasons.

But more and more people want to go solar
for economic reasons, because they see the payoff. Solar panels are improving. They are more efficient. They can operate even with less solar radiance,
so the demand is really there. WILLIAM BRANGHAM: If that demand continues
to grow, Florida utilities may move more into rooftop solar, joining Vermont and other states
where residential solar micro-grids are becoming almost commonplace. For the "PBS NewsHour," I'm William Brangham
in Arcadia, Florida. JUDY WOODRUFF: Fascinating..

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