In his article for the Quartz Daily Brief Tim Fernholz debunks electrical utility claims that increased solar panel reliance to off-set electrical costs will lead to increased rates for all customers. While the “death spiral” of increased solar energy use leading to increased electrical rates is revealed to be little more than a panicked response from power companies, Fernholz identifies that a regulatory solution must be crafted to facilitate our transition to a solar powered future.

By Tim Fernholz

In the US, electrical utilities are in a charged battle—complete with negative political ads—against solar panel distributors over rules that both sides say could put them out of business. Consumers are caught in the middle. 

A relatively new swathe of companies like Verengo, Sunrun, Sungevity and SolarCity have spent millions leasing solar equipment to homeowners and businesses. The cost of the lease is offset by savings on their electrical bill. Those savings come not just because of free power from the sun, but also through tax credits—and, most importantly today, because states allow those who have solar panels to sell any excess power back to the grid. 

The more than 200,000 “distributed solar generators” in the US produce less than 1% of the country’s electricity. But that’s growing thanks to the falling cost of photovoltaics and financing from investors like Google. And this worries the big power companies, particularly two of the country’s largest, Pacific Gas & Electric and Southern California Edison.