Barclays: Solar is about to disrupt the utility industry

The corporate bond analysts at Barclays are now talking about the new paradigm of solar and energy storage becoming the first existential threat to the utility business in a hundred years.

In Hawaii, as we’ve discussed, solar is already cost-competitive with the traditional grid and consumers are making the switch faster than the electric company can change pricing to account for it. It would make sense for the revolution to begin there – Hawaii has no coal or nat gas, it’s got to source its power feedstock from elsewhere, which makes it more expensive. In the meantime, the island chain is literally drenched in sunlight.

Barron’s has the comments from the Barclays credit research team – which I believe have much wider ramifications beyond utility bond pricing…

Electric utilities… are seen by many investors as a sturdy and defensive subset of the investment grade universe. Over the next few years, however, we believe that a confluence of declining cost trends in distributed solar photovoltaic (PV) power generation and residential-scale power storage is likely to disrupt the status quo. Based on our analysis, the cost of solar + storage for residential consumers of electricity is already competitive with the price of utility grid power in Hawaii. Of the other major markets, California could follow in 2017, New York and Arizona in 2018, and many other states soon after.

In the 100+ year history of the electric utility industry, there has never before been a truly cost-competitive substitute available for grid power. We believe that solar + storage could reconfigure the organization and regulation of the electric power business over the coming decade. We see near-term risks to credit from regulators and utilities falling behind the solar + storage adoption curve and long-term risks from a comprehensive re-imagining of the role utilities play in providing electric power.

I’ve been a bull on the solar equities for over a year now. Not sure if I’m ready to make the leap yet and become a bear on the electric utilities. Many of them are trying to incorporate more via large scale projects as we speak. If they can do so at competitive value propositions versus the rooftop option, they should be fine over time. In most cases.


This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. chris commented on Dec 05


    good info!!

  2. marvin commented on Dec 15



  3. flange safety spray shields commented on Sep 14

    … [Trackback]

    […] Read More Information here to that Topic: […]

  4. Eat Verts commented on Sep 21

    … [Trackback]

    […] Info on that Topic: […]

  5. td canadatrust easyweb commented on Nov 15

    … [Trackback]

    […] There you will find 9333 additional Info to that Topic: […]

  6. best cbd reddit commented on Nov 27

    … [Trackback]

    […] Find More to that Topic: […]

  7. 밤토끼시즌2 commented on Nov 29

    … [Trackback]

    […] There you will find 3915 additional Info to that Topic: […]

  8. bmo bank login commented on Jan 13

    … [Trackback]

    […] There you can find 94282 additional Info to that Topic: […]

  9. regression testing solutions commented on Jan 16

    … [Trackback]

    […] Here you can find 78055 additional Information on that Topic: […]