Goodbye, Electric Utilities
Hello, Neighborhood Nodes!
We hear a lot these days about the critical importance of repairing and improving the electric grid in the United States. Robinson Meyer, in a recent New York Times opinion piece, argues: “Our grid is too old and our supply of electricity too small. If we don’t meet this moment, we will face an impoverished future of more expensive, less reliable energy and slower economic growth. In a worst-case scenario, we could see Americans defect from the grid entirely, raising costs for everyone.” The Department of Energy suggests investing $150-300 billion just to improve national transmission capabilities, leaving aside needed investment for distribution upgrades. This works out to spending at least $3,000-$4,000 per household.
These recommendations are honestly nuts. Here’s what these analysts are not telling you: Utilities are fast becoming obsolete. Last month, I released a study I performed for the Mayor of Irvine, California. Again, some of the big picture numbers: Over the next 20 years, if nothing changes, the residents and businesses in Irvine will pay the local utility, Southern California Edison, about $58 billion for all the electricity they are projected to need. The cost of solarizing the city right now, with enough battery storage to defect from the grid, is about $16 billion. The economics of doing this are so favorable that the city could set up a local investment fund to provide the necessary capital and pay investors 7% per year. (If you’re interested in getting a copy of this study, please fill out this short form.)
The prevailing view, however, is that even a high degree of local solarization requires a healthy utility grid for backup. There are always scenarios, we’re told—weather events, natural catastrophes like earthquakes, unexpected equipment failures—that require a utility to provide backup electricity. This is also obsolete thinking.
Smart neighborhoods will increasingly connect with other neighborhoods using new dedicated cables and cutting-edge electrical routers. LFK, a company based in Lund, Sweden, is now demonstrating the viability of this concept by connecting 500 solarized buildings with 13,000 apartments. (You can learn more about this “Energy Net” concept by watching short videos here, here, and here.) If any node runs short on power, it can tap neighboring nodes. And nodes with a surplus can make money by selling it—no central utility needed.
The costs of rebuilding the energy system nodally are cheaper and faster by far than repairing the grid. Spending a trillion dollars on an obsolete grid is like repairing telephone land lines 20 years ago rather than building a wireless 5G system.
The economics of solarization in Irvine look good right now because it receives a high level of annual sunshine and the extremely high prices of the local utility. But because transmission and distribution systems are becoming more costly everywhere, utilities across the country will soon have to raise their rates to Southern California levels—and beyond. At the same time, household solar rates are projected to fall as solar cells become cheaper and more efficient. Elsewhere in the world, countries with lower utility rates, like those of Scandinavia, are solarizing much faster than we are. The trend is obvious.
Every dollar spent keeping obsolete utilities and grids alive simply slows the inevitable transition to decentralized solar. And if you are a local investor looking for a great return on a low-risk investment, local solarization is it. It’s also an investment that can be easily targeted at distressed households who would most benefit from defecting from the utilities sooner.
If you want more news on local investment, check out our articles below on bioregionalism, public ownership of utilities, “market humanism,” small-business ecosystems, and crowdfunding in Nova Scotia.
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— Michael Shuman, Publisher
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NEWS
The Promise of Bioregional Economies (Schumacher Center for a New Economics, June 4) reflects on the 45th Annual E. F. Schumacher Lecture with Samantha Power and Tyler Wakefield of the BioFi Project.
Arizonans Win Democratic Public Ownership of Electric Utility (In These Times, May 29), written by Marjorie Kelly and Thomas M. Hanna of The Democracy Collaborative, highlights the Salt River Project Clean Energy Team and other Democratic Public Ownership (DPO) efforts. “The growing interest in public ownership — and, more importantly, in DPO — reflects an increasing recognition that who owns and governs energy infrastructure matters as much as how electricity is generated.”
Market Humanism (Democracy: A Journal of Ideas, May 28) calls for an economy that enables human flourishing. “This new paradigm can not only help us create an economy that is fair, prosperous, and sustainable, but also repair our broken democracy.”
Conditions for Small Business Ecosystem Building (Brookings, May 26) summarizes the building blocks for cultivating thriving small businesses in regional economies. “Developing an effective small business ecosystem is very different from America’s fragmented approach, wherein time-starved small business owners must navigate a maze of well-intended but disconnected (and sometimes irrelevant) ‘assistance’ programs.”
Why This New Nova-Scotia Platform Could Solve a Major Community Investing Problem (Future of Good, May 19) features Backr, a new online platform that aims to make local investing easier.
SPONSOR CORNER
The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital and serves as MSJ’s fiscal sponsor. Thank you for being a part of a growing movement! Contact NC3 for support in integrating local investing in your work: info@nc3now.org.
NC3 UPDATES AND ANNOUNCEMENTS
Building Stronger Communities at the Old Salt Festival: Communities across the country are exploring new ways to strengthen local economies, support small businesses, and preserve the character of the places they call home. One example is the Old Salt Festival, hosted by Old Salt Co-op in Montana, taking place June 19–21.
At NC3, we focus on community investment, local ownership, and place-based strategies that keep wealth circulating where it is created. The conversations at the Old Salt Festival reflect many of these same priorities, particularly as rural communities work to support producers, entrepreneurs, and local infrastructure in ways that build long-term resilience.
The Old Salt Festival brings together ranchers, chefs, musicians, entrepreneurs, investors, and community leaders for several days of programming centered on food, agriculture, culture, and land stewardship. Hosted on a working ranch, it highlights the connections between local food systems, community well-being, and economic sustainability.
As part of the festival, Chris Miller, CEO of NC3, will give a presentation exploring how to empower everyday investors to support the communities and values they care about. His session will examine how community investment strategies can help local residents participate in building stronger economies while keeping ownership and decision-making closer to home.
For NC3, the Old Salt Festival is one example of how communities are experimenting with new approaches to ownership and investment that keep decision-making and value rooted in place. By bringing together diverse voices around shared challenges and opportunities, it offers a window into how local leadership and collaboration can help communities thrive.
PARTNER NEWS & VOICES
Wealth in Rhode Island, Local Return (June 5)
Celebrating World Localization Day with Helena Norberg-Hodge, Lift Economy (June 2)
Clients in the News: Empowering Local Economies, Pathlight Law (May 27)
When Worlds Align: Localization and Solarization, American Independent Business Alliance (May 27)
CfPA Urges Department of Labor to Provide a Meaningful Fiduciary Safe Harbor for Alternative Assets in Retirement Plans, Crowdfunding Professional Association (May 27)
Dr. Anthony Goodwin, CEO of the Development Cooperative, Is Thinking Big, Garlic and Roses (May 26)
Social Infrastructure: Bumping into Neighbors Leads to Resilience, Neighborhood Economics (May 13)
NOTABLE NEW RESOURCES
Beyond GDP: A New Compass of Progress for People and Planet, United Nations (May 7)
EVENTS
June 15: Mondays with Michael - Virtual Event
June 16: Catalytic Capital for Employee Ownership - Virtual Event
June 17: Fireside Chat with Erin Axelrod - A Finance Activist Shares How She Invests - Virtual Event
June 17: Laboratories of Democracy - Emerging State and Local Policy Visions - Virtual Event
June 17: How to Benchmark Your Impact Crowdfunding Portfolio vs. the Stock Market - Virtual Event
June 17-19: SVN’s Global Gathering - In-Person Event (Santa Fe, NM)
June 21: World Localization Day
June 19–21: Old Salt Festival - In-Person Event (Helmville, MT)
June 25: Michigan Good Business Summit - In-Person Event (Detroit, MI)
JOBS BOARD
Candide Group: Principal, Afterglow Climate Justice Fund
Mid Hudson Energy Transition: Program Director, Lending and Community Capital
About The Main Street Journal
The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street, facilitating economic development and economic justice. It’s sponsored by the National Coalition for Community Capital, with grants from the Heron Foundation, Wallace Global Foundation, and the Bondi Foundation. We welcome feedback about everything, from our design to our content. Please send ideas to Jen Risley at jen@main-street-journal.com.
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I'm an engineer and have done my own engineering plans with economic impact assessment for different options in the same specific location. The project first started with the concept of having automatic failover power generation. It moved from natural gas to diesel because the utility companies cannot always keep nat gas flowing, especially in extended freezing weather. Just for some very rough numbers, the diesel generator project was $50,000. Solarization was around $120,000. Both options assumed I did 100% of the labor including concrete, trenching, electrical. What is interesting in the figures is that the diesel generator is not in lieu of utility power, so it's never going to generate ROI. It's only pure risk mitigation. Solar would be in lieu of utility power. I would never sell back power to the grid because of the evil agreements you must sign for that. I would rather invest in more batteries and retain my own power generation for later use than think I'm getting some value from selling it back to an untrustworthy counterparty.
I agree with you about localization on power. I prefer the route of hyper localization. Hyper localization meaning that sure you can source components from the U.S., but operations and service must be hyper local. A few years ago, I looked into a battery inverter solar system and there was only one that did not require a cloud controller connection.
All Generac generators require cloud controller and eliminate local MQTT control capability. Cummins on the other hand does allow for the interface to a no-cloud, no remote interference, no subscription fee piece of hardware. That hardware can be run in a hardened network configuration and is an owned device. No subscription. No cloud controller.
I have not done my project yet considering I have a ton of other things going on. Looking at the full project and time horizon based on constraints, the $2500 automatic failover natural gas generator looks like a good option.
So far I have some buildings running fully independent except in the winter when power consumption for heaters exceeds what the solar can provide. That is the kind of hyper local I'm talking about. I think that property owners need to look hard at localizing one building at a time. If they start small and grow, it becomes completely attainable.
One of my plans included a 40 ft shipping container and a utility building. Strictly using south-facing panels and surfaces, between the utility building and the shipping container, that provided enough roof surface to handle 22kw. True output becomes around 18 kW. The shipping container can be insulated well on the inside and be the hardened container for the battery units and power control/management equipment. There are always logistical challenges associated with running large enough wires back from the battery bank to replace the grid input.
Zoning has absolutely not caught up and I don't see it changing in our lifetime. It would require an allowance to have a property that had no electric utility hookup. As it is now, if you drop that, you can forget your occupancy permit. They will condemn your property and get the sheriff to throw you out of your own property. The interim period will likely require a full panel interrupt redirect like an ATS does. That way the property can claim that it still has utility power and you pay the $30/mo fee to simply have the glory of the spy meter there. But otherwise you are not consuming power from the grid.