Thoughts On Watts

by Dhanur Grandhi

Read this first

The death of the Utility Co., as predicted by the Utility Co.s

…and summarized by me into this handy chart


Full report here, published by the Edison Electric Institute, the association of investor-owned electric utilities in the U.S.

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Exposure to sunlight is good for business


When you have a large number of customers with large roof areas consuming high volumes of electricity and paying steep prices for that electricity, you have a market that is primed for PV.

Consider this of California,

  • There are over 1.5 million commercial customers, more than in any other U.S state.
  • Small and medium businesses consume on average 64MWh (or 64 average U.S. homes) and large businesses consume 520MWh (or 520 homes) of electricity annually.
  • These businesses have around 84,000 acres (or 84,000 football fields) of roof area available for PV, more than in any other U.S. state.
  • They pay an average price of 16.15c/kWh for electricity, 50% higher than the U.S. average and the third-highest after Hawaii and New York.

All these factors make California an attractive market for Commercial PV. Not surprisingly, the state accounted for nearly 40% of all Non-Residential PV

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The case for distributed energy generation

Electricity losses from generation, transmission and distribution represent 50% of all energy used in the residential sector.
While making the case for direct use natural gas, this chart also inadvertently makes the case for distributed power generation.

Gas Losses.png

Source: American Gas Association

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Why the electricity demand curve slopes upward, and why that matters.

Conventional demand curves slope downward – when the price of something decreases, the quantity demanded increases. The electricity demand curve however, goes the other way. The thing is, it does not have to be that way. If you can change the direction of a consumer’s electricity demand curve, you create an economic opportunity for that consumer. Understanding this curve therefore is key to disrupting the electricity market.
So why does electricity demand slope upward?

A few reasons.

First, electricity is dispatched based on the lowest marginal cost i.e., the cheapest power gets produced and sent out to the grid first. This is because every extra unit of power requires resources that are increasingly expensive. Coal-powered electricity goes first, then hydro, nuclear, gas and so on. So, as consumers use more power, they are buying increasingly more expensive power.


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