In this interview, SolarCity CEO Lyndon Rive discusses how electric utilities have shifted from initially promoting rooftop solar as a green branding exercise to aggressively opposing it once the technology became a genuine market threat. He describes utility tactics such as greenwashing with billboard campaigns, then pushing onerous regulations like requiring serial numbers of equipment at contract signing—a move that could criminalize installers for errors. Rive explains the mechanics of net metering, where solar customers receive retail-rate credits for excess generation, and counters utility claims of a cost shift by citing independent studies that show solar benefits the grid. He notes that regulatory battles vary by state, overseen by Public Utility Commissions, with some states (e.g., Arizona) allowing utilities to influence regulator elections. The utilities, coordinated through the Edison Electric Institute (EEI), have launched a coordinated campaign to protect their monopoly, likening the threat to the decline of landline telephony. SolarCity’s counter‑strategy involves mobilizing customers, lobbying, and litigating net metering cases—winning 23 of 24 recent fights. The conversation highlights the broader clash between incumbent utilities and the emerging distributed solar industry.
Chapters
About how utilities have responded. I did kind of go through how different industries are faced with— what normally happens is that the competitors poo-poo you, they ignore you for a while, and then when you get too big to ignore, then they run to the government and say, you've got to make this illegal.
Sure.
And then they just fight to the death. And it's usually their death if you have a successful business that seems to be going after their market. So tell me what the utilities have done and what their strategy is and what's your counter-strategy.
Yes, so I mean, we're going through exactly that phase that you just mentioned. One slight twist to that. The utility industry in the beginning actually promoted solar. They were convinced that there's no way this can ever be a threat. It's going to be way too expensive, but it's cool for their brand. So they were leveraging that and essentially doing some greenwashing, which is unfortunate. There's been a lot of greenwashing going on. So they started promoting solar. They would actually take billboards up. In fact, PG&E had billboards out, go solar and get solar for your home. I haven't seen one recently. I haven't seen one recently either. They've stopped that a little while ago. So that was the early phase. Then now they're in that phase of, okay, this is becoming a real threat. Let's leverage every political muscle we can to stop it. Like, and they've tried nasty things, like trying to place super onerous burden in regulation. We currently already got oversight by 14 different agencies, government agencies. The utilities are trying to push a bill in different states where, if that bill goes through, will be the most highly regulated industry in the freaking world. Like, here's the thing that they would say into it. When you propose a customer and you set— you sign— have them sign a contract to go solar, there's normally about a 2-month time to get the permit and everything ready, and then you can install it. At the time of signing the contract, at the time of signing the contract, you've got to identify every single serial number of the equipment that you're going to be installing.
What?
You haven't even received the equipment yet. How are you going to be able to identify it? Identifying it at the time of installation, no problem. But it's intentionally done to identify it at the time of Signing. Then if you are wrong, it's perjury. So you go to jail over a serial number. So it's just like such obnoxious type of regulation they pushed. And it was in a bill. We had to put in so much amount of effort to try and kill it. It almost went through. So that's like one example. Another example, the one that is the biggest fight right now, is net metering. So do you guys all know how solar works?
Why don't you explain?
Let me explain it to you. So you get a solar system on your roof. You're still connected to the grid. During the day, you're not at home, so you backfeed your meter, and your meter spins backwards. Then at night, you consume those credits again, and it spins forward again. And that is kilowatt-hour for kilowatt-hour. So very straightforward. You give energy to the utility, they give it back to you at night.
Are the rates the same, or are you getting paid retail and being charged wholesale?
If you look at the cost per kilowatt-hour, it is kilowatt-hour for kilowatt-hour. So you get charged retail, so you get credited at retail. So it is the same. What you're getting charged is what you get credited for. But here's the thing that is—
Is there a time of use differential with most utilities?
Most cases— so there are some time of use programs. And California is slightly unique where we actually have peak— the more you use, the more expensive energy becomes. So we have these big tiers.
So peak and off-peak hours.
That's more of a California phenomenon. Most of the country doesn't do that. It's just flat. It's just flat rates. But from the high level, then the utilities say there's a cost shift. Well, you're providing me energy, and I can generate that energy at a lower cost, so therefore there is a cost shift. And so optically, you can kind of see, OK, That makes sense. We're providing it to you at retail, and you can generate at a lower rate. So I can kind of see. But we're providing you energy during the day, where it's really expensive. We're also helping you with grid services. We're helping you with not needing to upgrade your transmission distribution lines. So there's a whole bunch of other services. Surely that's going to save you money too. And the utility's answer is, no, no. No benefit there. So we go, OK, how about we get an independent study done on this? Because right now you're saying there's no benefit, but you're the one who has to say there's no benefit. Every single independent study done in the country, every single one, says that solar is a benefit to the grid and it covers its cost of service. But yet people write about there's a cost shift. Why could the utilities say that? And it's amazing to me when I go to these different hearings is that what the utility says is true. It's always true. And I'm like, why do you believe the incumbent monopoly? Like, who's the oversight to review all the information they say to verify that it's correct? Why is it just assumed correct? And when there is oversight done and an independent study done to say that there is actually a cost-benefit, Why does this get ignored? It just blows my mind.
What normally happens is they lobby really hard and then they line up against you. Is that happening too? Are you getting multiple utilities coming after you?
Yeah.
Does it vary state by state? Do the regulations vary state by state or is this going to be a federal issue? Across the board thing?
No. It varies state by state, and it's managed by the PUC, the Public Utility Commission. Depending on the state, the different stances that the utilities take are— some are very aggressive, some are not that aggressive. Right now, Arizona is extremely aggressive. It's also the only state that I know of where it is legal for the utility to sponsor the election campaign of the regulators. You'd think that should be no, but it's yes. It's actually an ACC. It's an elected commission versus a public commission. But the utility industry belongs to an association called EEI. Edison Electric Institute. They have collaborated and have come up with a full-frontal attack on how to attack the solar industry. They've actually had presentations that they deliver to all their CEOs of, we do not want to become like the phone line industry. How do we stop this? Cell phones, And what happened to the cell phone industry, to the landline, there's a possibility that the same thing can happen to the utility with rooftop solar. And so they give these presentations to all the CEOs, and then the tactics is how do they stop it? So absolutely, it's—
Mm-hmm.
And it's brutal. They have massive budgets. They have large workforce. And then we're the little guy up against the big guy. We've had 24 net metering fights in the country over the last year and a half. We've won 23 out of 24.
And what was your strategy in winning? How did you win?
So the biggest strategy is you kind of know you're the good guy when you're providing Choice. You're providing competition. You're providing a cleaner source of energy. And they are just— when they go out and pitch themselves, it's pretty clear they just want to protect their monopoly and do not want to allow competition to get into the market. So we get our customers to rally behind us. So we get customers to show up to the commission hearing. We've had people— some of the commission hearings, we've had the line go out of the door. Literally, you can't get in because customers are so passionate about starting to control their own energy and given choice versus being beholden to the monopoly. And when the commissioners hear all this, they realize that this is the better solution. Like, the number one creator for innovation, the number one creator is competition. If there was no competition, products would suck. Like, it would barely get the job done. Right now, there's no competition in the utility sector, and that's why there's been no innovation. Like, what has changed in the utility business? The only thing that has changed since I've been alive is a smart meter. Again, let me tell you how smart this meter is. You don't have to meter it anymore. It's like, you could have figured that out a long time ago. So there's a lot more other things you can do with it. Use the features of it.
