Perspectives

Case Study

Utility Investment in Solar Distributed Generation

Creating a profitable approach for utility market participation in solar distributed generation.

Key Business Challenges

  • A leading west coast utility has been increasing concerned about the impact solar PV is having on its business as more of their customers partner with third parties to have distributed generation.

  • Rate decoupling lessens the immediate impact of DG solar, but still requires higher rates and is ultimately unsustainable.

  • The utility wants to participate in this market due to increasing concern about customer disintermediation that is occurring with third party solar providers.

Solution

Bridge partnered with our client and leveraged our proprietary models to quantify timing and impact of solar as well as identify key areas where the utility could participate:

  • Prioritize and balance key criteria for evaluating solar opportunities including financial returns, strategic fit, and educational benefit

  • Leveraged proprietary Bridge models and tools, using solar PV installation costs, incentives, technical parameters, and rate forecasts as inputs, to develop expected timing for both residential and commercial retail rate parity across all jurisdictions

  • Evaluate potential across the upstream and downstream solar PV value chain

Realized Benefits

  • Created go forward strategy approach to pursue commercial scale solar PV development

  • Created organization plan with required resources, organization structure, role descriptions, and rollout timing

  • Quantified required investment capital and associated pro forma financials.  Determined target profit margins and key milestones