Here Comes the Sun

Posted on Dec 6, 2013 | 3 Comments

solar_system

In his 1995 book Managing in a Time of Great ChangePeter Drucker predicted that, after the year 2000, the “environmental market” would flourish, with solar power cells becoming affordable and “no longer ‘sci-fi.’

Today, as a glut of solar panels have caused many producers to close up shop, Time magazine’s Bryan Walsh has seen the future, and it is SolarCity.

Co-founded by entrepreneur Lyndon Rive (a cousin of Tesla Motors CEO Elon Musk, but that’s a separate post—too much to ponder), SolarCity’s business isn’t solar manufacturing but solar installation. Rive has 80,000 customers now, and he hopes to have 1 million by 2018. (To sweeten the pot, SolarCity intends to bundle its power with Tesla batteries, to allow for better energy storage.)

In fact, Rive believes that his company is on the verge of shaking up the entire utility industry. “We’re going to change the business model,” he says.

Meanwhile, David Owens, executive vice president of the trade group Edison Electric Institute, tells Time he isn’t worried. “You might not need a [telephone] landline, but you’re always going to want to be connected to the grid,” Owens says.

Oh, dear. We were probably a little more skeptical of Rive’s grand vision before we heard Owens’s response. Suddenly, we’re measuring our roof for solar panels.

What everybody in the business ‘knows’ can never happen should be examined carefully,” Drucker advised in Managing for Results. “Quite often managements will insist that a development is impossible because they are afraid of it while convinced that it is inevitable.”

Drucker’s cautionary tale was of makers of “heavy electrical switchgear for power houses and transformer stations,” who “published papers proving the theoretical impossibility of electronic power-switching.” Did that get them anywhere? Well, yes, but nowhere good. As Drucker explained, “The only result of this head-in-the-sand attitude was that the leading manufacturers did not work on electronic development and were in danger of losing the market when electronic switchgear was finally developed—by other companies.”

“If a business continues to stick to the existing, traditional, established—or denies that anything else is possible—a change may destroy it in the end,” Drucker warned.

Perhaps it’s time for the strategists at Edison Electric Institute to power up some new thinking.

What do you think? Do you believe that you’ll be a solar power customer in your lifetime?

3 Comments

  1. Judie Forbes
    December 7, 2013

    in 1977 I designed a patio cover with solar panels as the roof to heat the pool and hot tub. After a couple of months getting it approved by the city, the scenic zone corridor commission, and the home owners association, the latter two of which had rules against any rooftop installations, I realized that few would have similar systems. But I persisted and the system was built and worked wonderfully.

    Few of the issues to being a solar power customer are technology related.

    Reply
  2. scott foster
    December 7, 2013

    I concur. What we have witnessed in Hawaii has been the great opposition to solar by the electric utility company. They’ve been dragged kicking and screaming into accepting solar; smart grids and all the rest. It’s been a long contentious struggle.

    Reply
  3. Jessica M. Moore
    January 8, 2014

    The utilities commissioned a study that foretasted the advent of increased distributed generation on power generation being the beginning of the end for them. Here is an article about it and a link to the study:

    http://grist.org/climate-energy/solar-panels-could-destroy-u-s-utilities-according-to-u-s-utilities/

    http://www.eei.org/ourissues/finance/Documents/disruptivechallenges.pdf

    Reply

Leave a Reply