A Utility Willing to Cannibalize Revenues for Residential Microgrids

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Ribbon-cutting event for residential microgrids installation

Ribbon-cutting event for residential microgrid installation

Oshawa Power & Utilities, located in Ontario, is willing to cannibalize its own revenues to stay relevant — and offer customers residential microgrids.

The small utility (55,000 electric customers) has already installed its first solar-plus-storage system from Tabuchi Electric for a customer, and is working on a pilot of 30 homes. Oshawa Power CEO Atul Mahajan says that’s just a first step. In the long run, he wants to take a “maverick approach,” and aggregate residential utility customers, then provide electricity through nanogrids.

“This is very disruptive to our business model,” says Mahajan. “The more we sell these, the less money utilities will make. But the technology enables us to serve the customer better.”

“…the technology enables us to serve the customer better.”

If the utility doesn’t offer this option, it’s likely the customers will go out and buy the systems themselves, he says.

“Customers care about reliability and cost, and some customers really care about the environment,” he says. Microgrids will provide reliability during extreme weather events and, as the cost of solar power continues to drop, will allow customers to have less expensive power, he says.

“I would partner with any technology provider to market this because we want to be aggressive. Nothing stops me from selling this system in any service area with my utility knowledge,” says Mahajan.

The product is is a 5.5 kW solar system with a 10-kWh battery. It includes a hybrid inverter that manages the battery and the solar at the same time, says Daniel Hill, director of sales and marketing for Tabuchi.

The product is enclosed in one box — except for the batteries, which makes it easier for the installer, Hill says.  It’s capable of feeding power back to the grid. Customers can charge the battery when rates are lower and discharge the electricity when rates are higher. In areas where there is a demand charge, customers can use the stored energy during peak hours to reduce demand charges.

Mahajan says that he wants to start buying the solar panels, inverters and control systems and use the economies of scale realized by bulk purchases to offer the products to entire subdivisions.

“I could then install this equipment for the benefit of my customers by providing them cheaper power, reliability and comfort. We would be playing our part in the green economy. As we speak people are gathering in Paris to talk about climate change. This is a huge opportunity to step up and provide my investors with a new model of asset investment and management as a utility,” he says.

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Comments

  1. “This is very disruptive to our business model”, perhaps only due Oshawa’s current or Western business culture’s short term quarter to quarter value system. Folks, we have to think a more long term. We are all in this together. Micro-grids, micro-business offer greater economic stability long term, creates more options, provides a more vibrant and balanced economy, as well as should make for a better environment where we all live.

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