Over the past decade, the installation of solar panels in homes has exploded. According to the Solar Energy Industries Association (SEIA), residential solar capacity in the United States has increased substantially since 2010. There are now over 3 million solar-powered homes nationwide.
This phenomenal growth is attributed to dropping costs, favorable public policies, increased eco-awareness, and utilities expanding community solar programs. It represents an energy revolution happening on individual rooftops that is transforming the relationship between homeowners and electric grids.
How Rooftop Solar Panels Work
Before examining the larger grid impacts, it helps to understand how rooftop systems function. These panels are made up of photovoltaic cells, typically silicon semiconductors, which generate direct current (DC) electricity upon exposure to sunlight.
The DC is converted into alternating current (AC) through one or more inverters so that it is usable in homes. The inverter ties the solar array to the home’s main electrical panel and existing wiring.
Any excess energy not immediately used by the home’s electric loads flows back through the main service panel and the bidirectional meter into the utility grid. This typically results in a credit on the homeowner’s electricity bills through a billing mechanism called net metering.
In essence, the grid acts as a storage battery for surplus solar power. Grid-tied systems allow homes to draw supplemental power from the grid when system production is insufficient to meet use.
According to the experts at Vivint Solar, a battery storage system can be installed to capture excess electricity generated, which can then be used during low power outage times such as at night or on cloudy days. This means that the system will not send electricity back to the grid.
Lower Electricity Sales for Utilities
For electric utility companies and providers, the rise of rooftop solar presents some complex challenges. One major impact is reduced electricity sales, especially during peak daylight hours when solar panels are most productive.
When homeowners can generate a significant portion of their power, they purchase less electricity from the grid. While this is great news for consumers with lowered bills, it eats into utility revenue streams.
In areas where solar adoption is very high, utilities are seeing measurable dips in total retail electricity sales. As more homes add rooftop systems, this trend will become more pronounced. Less revenue will force utilities to reevaluate their business models and rate structures.
Some may institute fixed grid access fees or extra demand charges on solar customers to make up for lost electricity sales.
Learn about the impact of solar panels and how they can save you money on energy bills in our comprehensive guide.
The Duck Curve and Grid Stability Challenges
Another impact of increased rooftop solar pertains to the duck curve, which illustrates how the net load on the grid fluctuates throughout the day. Around noon when output peaks, the net load drops substantially. But in the evening when the production disappears, the net load ramps up rapidly.
This daily pattern of steep ramps driven by solar adoption makes balancing supply and demand more challenging for grid operators.
Without proper coordination, the variability and intermittency of residential solar energy fed into distribution grids can also threaten the stability and contribute to voltage fluctuations. Utility engineers are growing concerned about managing two-way power flows from thousands of independent generators.
Upgrading grid infrastructure and implementing smart inverters is necessary to maintain reliable electric service as solar penetration increases.
The Need for Energy Storage and Smoothing
To counteract the duck curve and provide grid balancing services, there is increasing interest in pairing home systems with energy storage. Battery technology is improving as costs come down.
With a battery or electric vehicle (EV) charger, excess daytime energy can be stored and released during evening peaks when the sun goes down.
Smart inverters are also capable of smoothing out the variability of solar generation so that it integrates seamlessly with grid operations. Sophisticated energy management systems that control networked battery units can be utilized for grid stabilization as virtual power plants.
Storage and intelligent energy management will be key enablers for widespread solar adoption.
Net Metering – The Cornerstone Policy Supporting Solar
A foundational policy supporting rooftop solar growth is net energy metering (NEM), which is now implemented in the vast majority of states. Under NEM, any surplus power fed into the grid spins the home’s existing meter backward, providing full retail rate bill credits. This 1:1 compensation ensures homeowners get fair value for their excess generation.
But as residential solar keeps expanding, some utilities are questioning long-term sustainability and are lobbying to replace NEM. A few states are transitioning to new models like a buy-all/sell-all approach.
However, changes to NEM policies could upend the economics of home solar. Minimizing disruptions will be crucial so the solar revolution can keep marching ahead.
The Outlook for Residential Solar Remains Sunny
Despite some lingering challenges around grid integration and policies, the future is quite bright for rooftop systems. Blockbuster growth is expected to continue thanks to improving technology, lower costs, and global action on climate change.
According to projections by SEIA, total residential solar capacity will nearly triple over the next 5 years. Already solar makes up 40% of all new electricity generation capacity. It is well on the way to becoming a pillar of modern clean energy economies. That revolution in humankind’s relationship with the sun starts one rooftop at a time.
Conclusion
The rise of home systems is transforming how we produce and consume electricity. But it also raises complex technical and policy issues around integrating massive numbers of distributed energy resources into legacy grids.
As residential solar expands its reach, regulators, and utilities must collaborate to smooth the transition in a way that preserves reliability and accessibility of service.
With wise planning and investments, the same grids that powered the 20th century can be updated to accommodate the democratization of energy in the 21st. The path forward relies on fair compensation, widespread storage, and optimizing grids to harness the full potential of solar energy.
