Energy utilities face losing between $18 billion and $48 billion a year in the U.S and up to €61 billion a year in Europe by 2025 as solar power and energy conservation initiatives grow, according to Accenture.
The Accenture analysis, based on extensive modeling and a survey of global utilities executives, estimates that energy demand could be reduced by more than 15% due to new energy technologies by 2025.
For example, researchers at the Australian Centre for Advanced Photovoltaics at the University of New South Wales announced that they've achieved 40.4% efficiency in converting sunlight to electricity by using commercially available solar cells combined with a mirror and filters that reduce wasted energy.
The average conversion ratio for solar cells is around 16% to 18%, according to Amit Ronen, director of George Washington University's Solar Institute in Washington. The best solar cells are able to convert as much as 20% of the sunlight they absorb into electricity, he added.
Accenture's "Digitally Enabled Grid" study found that utility executives are "notably more concerned" about the impact of renewable energy on their revenue streams than in the past.
This year, 61% of utility executives surveyed by Accenture indicated they expect significant or moderate revenue reductions as a result of distributed electricity generation, such as solar photovoltaic (PVs), compared to 43% last year.
Accenture conducted telephone interviews with 85 utility executives from 20 countries between July and October.
PVs, electricity storage such as lithium-ion batteries, electrification of heating and transport, energy efficiency, energy conservation and demand response, are all poised to reduce utility revenue, Accenture stated.
The cost of rooftop solar-powered electricity will be on par with prices for common coal or oil-powered generation in two years, and the technology to produce it will only get cheaper, according to a recent report from Deutsche Bank's solar industry analyst, Vishal Shah.
One of the factors spurring growth is the expiration of the federal government's solar investment tax credit (ITC). That measure, passed in 2008, offered a 30% tax credit for residential and business installations for solar energy. When it expires in 2016, the tax credit will drop to a more permanent 10%.
"Consequently, we expect to see a big rush of new installations ahead of the 2016 ITC expiration," Shah stated in his research document.
Even adoption of energy efficiency and distributed generation "will become possible without subsidies, which will lead to greater market penetration as a result of shifting consumer sentiment, falling technology costs and a moderate rise in electricity prices, especially across Europe," said Valentine de Miguel, global managing director of Accenture Smart Grid Services, in a statement.
Accenture largely agreed with Deutsche Bank that Solar PV is already at grid parity - equal to or less than the cost of power purchased from the grid - in many states.
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