Reducing the electric utility death spiral

Electric utilities are seeing substantial declines in revenue as the result of the installation of rooftop solar. Rate design changes can reduce the link between these revenue declines and the decline in net income. Substantial portions of utility revenue is collected on an energy (MWh) basis, much larger than the proportion of utility costs. Increasing the portion of utility revenue that is collected on a demand (kW) basis can reduce the decline in revenue and the decline in net income.