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Doubling down on past forecasts, Moody's said in a recent report that utilities in the U.S. have "plenty of time" to prepare for the widespread deployment of distributed generation and other smart-grid technologies, such as affordable battery storage, that could materially eat into profits and potentially upend the country's centralized power system.
The assessment echoed a Macquarie Capital (USA) Inc. analysis in January that said predictions about the "impending demise" of the central grid are as exaggerated as the made-for-TV disaster movie "Sharknado."
The risks to utilities today from distributed generation such as rooftop solar panels "are more conceptual than specific," Moody's said April 23. "We think the electric grid is efficient and reliable, and because it constitutes a critical infrastructure asset necessary for a functioning economy, we expect a material amount of political and regulatory support to maintain grid reliability. We also note that most of the DG technologies or services currently being evaluated require a connection to the existing grid."
In November 2013, Moody's said it did not expect distributed generation to threaten the credit ratings or financial health of regulated utilities in the U.S.
Those readings of the market stand in stark contrast to others that have warned of looming disruptions as ratepayers combine solar panels and batteries to drop off the grid. The deep divide illustrates the uncertainty surrounding the work utilities and state regulators are undertaking to prepare for technological advances that Moody's acknowledged...