"Subsidies and falling technology costs are making distributed solar power cost-competitive [and] as more people switch to solar, utilities sell less electricity to those customers [causing the] utilities [to] spread their high fixed costs ... over fewer kilowatt-hours, making solar power even more competitive and pushing more people to adopt it," WSJ's Liam Denning notes, describing what is dubbed "the death-spiral thesis" for traditional utilities.
Denning says it's the merchant generators (like NRG) that have the most to worry about: "For regulated utilities, the idea that solar panels will enable everyone to leave the grid, making such networks redundant, is overstated."
Although the threat may seem distant for now, Denning says it's worth taking seriously if you're an investor. "The gyres may look exceedingly wide, but that spiral is taking shape," he says.
Some individual names: Southern Company (SO), Edison International (EIX), Duke Energy (DUK -0.1%), FirstEnergy (FE -0.7%), XCel Energy (XEL +0.2%), American Electric Power (AEP -0.2%), Dominion (D -0.2%), Exelon (EXC +0.5%).