[ChuckMcM]

TL:DR; version: Utilities make most of their profit during 'peak' times (noon to 5pm) and SolarPV systems are reducing the requirement during those times, putting price pressure on electricity.

Here in California we had a similar challenge but with Watar. We periodically go through drought cycles and during the last big incentives were put in place to get people to use less water, rebates for toilets, reduced cost if you were 20% below your non-drought average, no watering during the day, drip irrigation, etc etc. Then the utility needs a rate increase because they aren't getting as much water usage. It is a hard sell though to tell people "You have to use 20% less but we're going to charge you the same amount"

So electricity, like water, is a blended cost where the scarcity unit is priced to cover the physical plant costs of delivering the unit. We wholesale adoption of Solar PV it will require power utilities to come up with a different formula to recover their costs. The end result is that it will shift the cost from business (who pay the biggest power bills during the day) to non-businesses.

[1] http://sanfrancisco.cbslocal.com/2011/04/19/east-bay-custome...