Government-owned electricity plants are facing growing competition from the solar panel industry. Today, about 5% of firms’ electricity is generated in-house. But this is rising. Wal-mart thinks its solar-generated share will be 20% by 2020.
The key is real estate: empty roofs. The company can put solar cells on its roofs. This lets the firm get free of the government-owned public utilities.
There are tax breaks for clean power. This subsidy will drop over the next few years. Too bad. Tax breaks are a good thing. The state collects less money. There should be more of them. But the decline is not expected to reverse the trend.
Technologies advance in the private sector. They do not advance nearly so fast in the government sector. So, public utilities are always on the defensive. They face competition from multiple technologies. Competition is positive.
At the margin, the private sector continues to undermine the lead enjoyed by government-owned public utilities. This is not going to stop as long as the private sector is allowed to compete. Slowly, public utilities are being replaced by privately owned firms. Decentralization is replacing centralization. Local is replacing regional and national.
Think of the final scene in Back to the Future. When we all have Mr. Fusion units to supply our power, the public utilities will be a relic of the past.