While adopting solar power in developed markets usually weighs on utility incumbents there, Asia's players are likely to reap benefits, Bernstein Research said.
In developed markets, increasing solar installations means the power grid sees declining demand for daytime power, dinging the "sweet spot" for selling electricity in competitive markets, Bernstein said in a note Monday. Distribution utilities, which recover the high costs of their infrastructure by volume-based charges, also take a hit as they lose their natural monopoly, the report said.
But within Asia, it's a completely different story, Bernstein said.
"Solar adoption in developing markets improves grid stability, lowers reliance on imported fuel, acts as a hedge against rising energy costs, and improves the environment. It is an unambiguous positive," it said.
The reason for the difference? Utilities in small and developing markets typically have a monopoly, Bernstein said.
"The costs of building power stations or distribution networks are sufficiently high that rarely would a developing economy wish to incur these costs twice. This has meant that – in many Asian economies – power utility returns are regulated," it said. In places such as India, Indonesia, the Philippines, Myanmar and Thailand, "more solar simply lowers peak power demand and reduces the need for construction of gas-fired power plants and improves grid reliability," it said.