Consumers' dependence on utilities won't change until there are major advances in technology for batteries that can store the power a home-based system generates until it's needed, said Matt Feinstein, senior analyst at Lux Research.
"Energy storage is not financially feasible," Feinstein said. "If it were, the utility industry would crumble. But it's not."
Feinstein said those advances in energy storage are years away, and until that happens, the utilities will be similar to the businesses investors see today, paying out a higher dividend yield than any other sector and accounting for more than 7 percent of the value of U.S. corporate bonds, according to Barclays.
Bond rating agencies remain bullish on utilities. Moody's raised its rating on the sector earlier this year. And according to Standard & Poor's utility bond analyst Gabe Grosberg, "We've never cut a rating on a utility because of distributed generation. Its impact on the market is fairly insignificant at this point.''
The energy storage issue is the No. 1 reason why bond rating agencies have been calm about the threat from distributed generation, Grosberg said.
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All of this is relatively uncontroversial, with even solar backers saying the conversion to more distributed power will be slow. But they argue the innovations will arrive sooner than the 30-year expected life of coal or gas plants financed by utilities' bonds.
"If price parity doesn't happen for 10 years, you're still not halfway through the life of utility assets built today," said Solar Energy Industry Association research director Justin Baca, pointing to a Rocky Mountain Institute study thatpredicts distributed solar will be as cheap as conventional electricity by 2030 and sooner in some parts of the country.