Deregulated energy markets accelerate solar adoption

The article lays out 3 different business models in the energy industry and calls them "regulated", "partially deregulated", and "deregulated". While the distinction between them isn't made very clear (at least to me), it argues that the "deregulated" models are better at responding to market conditions, and thus better at pivoting to solar power, than regulated ones.

It doesn't clearly tie the choice of business model to the way the businesses are regulated, so it fails to support the claim that regulation is the cause of the lack of solar adoption. The examples it uses to make its case, the TVA and the state of Texas, are also not great.

The TVA is owned by the government. So the question of their pivot to solar power is more of a political question than an economic one. Is there any political will to spend tax dollars pivoting the TVA away from nuclear and hydro sources to solar? Which politicians support/reject the policy and why?

Texas is also not a great example given the recent tragedies arguably resulting from their lack of regulation. https://en.wikipedia.org/wiki/2021_Texas_power_crisis

In-line with other comments, Enron is a classic case-study of the consequences of allowing free markets unfettered control over essential infrastructure.

I thought the article did a good job answering your questions.

> TVA benefits from existing capex in large nuclear and hydro plants, enjoys low rates, and has little incentive to change.

So apparently TVA has already invested in large nuclear and hydro and doesn't need more power. It's not about to build more solar so that it can shut down its nuclear or hydro plants. No business will cannibalize itself like this. It will have to a different economic entity.

> Regulated utilities can also sign PPAs, but the lengthy and complex regulatory approvals make the process so cumbersome that few investors or developers actually pursue this option.

Regulated entities can theoretically do this, but they are cumbersome so they don't.

The article also mentions the tragedy of the 2021 crisis, along with the 2020 blackouts in California; the article says it's a matter of extreme weather, not the failure of a specific type of energy market.

> large capex in existing infrastructure with little incentive to change is common to most large companies, so picking the TVA as the "regulated" energy example seems a little like cherry-picking to me.

> I'm not read into the details of PPA regulations. There may be a good point there about how some/all of them are too onerous which de-incentivizes change. idk.

> ensuring that companies we entrust with providing critical infrastructure are resilient to extreme weather is a matter of regulation. I think that the Texas and California examples were both specific instances of regulatory failures regardless of their ambient culture of regulation.