Relationships are getting weird in the power industry.
The AI build-out is accomplishing what a decade of advocacy couldn’t: turning utilities and distributed energy companies into collaborators.
Those who went to war with utilities during the net metering battles of the mid-2010s are now sitting across the table from them, being asked how distributed energy can help utilities meet the challenge of serving growing demand for their product.
Marcos Krapels has a front row seat to the changing relationships. A veteran of SolarCity — which was one of the fiercest combatants in the net metering wars with utilities — Krapels is now a senior executive at microinverter company Enphase Energy.
In a recent episode of the Energy Changemakers Podcast, Krapels gave me an inside look at the new kinds of conversations taking place between utilities and distributed energy companies across multiple states.
This is the part of the conversation that really struck me
Krapels describes having dinner recently with a senior vice president from a major California utility — the kind of conversation that probably wouldn’t have happened a few years ago.
They talked openly about how the solar industry “used to be the enemy,” a battle that Krapels says left “scars on his back.”
Now, he realizes distributed energy was fighting the wrong battle.
Solar, alone, wasn’t enough. “We don’t want to add more to the ‘duck curve,‘” he says.
Falling energy storage prices brought the solution into view. Todays’ play is “bundled flexible assets that provide real value,” he says.
That means solar plus storage plus bidirectional EV chargers, all orchestrated by smart home energy management systems, aggregated into what utilities can actually use — dispatchable, reliable blocks of power.
A few years ago, this solution was hard to sell to utilities. But no more.
Tough math for utilities
That’s because utility executives have had their own realization. The supply/demand math has changed, and it’s making them nervous.
Krapels says the US needs at least an additional 100 GW to support the load from data centers and AI infrastructure. The utility industry, which hasn’t seen load growth in decades, suddenly has to step up to the plate.
“There’s not a single utility that is not worried about how do I find capacity,” he says. One solution: Free up grid capacity for data centers by installing solar and battery storage on millions of homes.
But that’s no small task. Only about 8% of the country’s 86 million homes have solar.
“There are 80 million rooftops left to go,” he says. “What are we waiting for?”
Put a 10-kW solar system and a 10-kWh battery on just 10 million new homes, and you’ve unlocked 100 GW of new energy capacity — flexible, dispatchable, already interconnected.
“None of this can happen overnight, but distributed energy can be built faster than centralized generation now, he says, given the supply chain constraints, he says. “Try to buy a gas turbine right now. Good luck. You’re going to be in the waiting line. You want to add solar to your home. Battery storage? We can do that in a week.”
Listen to the full episode: Utilities Are Warming to DERs. Thank Data Centers.
