(3BL Media/Justmeans) - We’ve written in the past about the challenges facing the utility industry, with Barclay’s downgrading the entire industry as a poor investment prospect. The phenomenon of grid defection, customers cutting their ties with the utility in favor of a solar array with batteries, or a grid-tied system enabled through net metering is taking its toll on profitability. Traditional electric utility business models have rather suddenly become an endangered species. Not that the companies will necessarily disappear. Some might, of course, but those that remain will look very different than they do today.
Take a look at NRG, one of the nation’s largest power companies, operating in the Midwest, that has traditionally burned coal for about a third of its power. CEO David Crane, who has a degree in Public Policy from Princeton and a law degree from Harvard, has apparently seen the writing on the wall. The company has taken dramatic steps over the past year including natural gas conversions and plant closings to reduce its dependence on coal. One plant is even being converted to run on low-sulphur diesel. When combined, these changes will result in a 25% reduction of coal purchases.
There was a time not long ago when such moves would be considered iconoclastic for such a staid industry. But that is just the beginning of this latest chapter in the NRG story. Last week NRG announced the acquisition of Goal Zero, a manufacturing start-up that produces small solar charged battery packs. Their products are popular in big box sporting goods stores, ranging from solar powered speakers for camping to 1250 Watt-hour solar home generators.
“It allows us to expand the opportunity of solar,” said Crane. “Our ultimate goal is to energize people wherever they are.”
It sounds reasonable enough, though it’s a big move for a utility company to start selling consumer products. That might just be what it takes to stay afloat in this changing world.