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Luminalt worker installs a solar panel on the roof of a home on May 9, 2018, in San Francisco, California. Photo: Justin Sullivan via Getty Images

As the costs for fossil fuels continue to rise and the prices for renewable energy hit all-time lows, fast-moving startups and adaptive incumbents are developing new energy service models.

The big picture: Traditional utility models, organized around the subsidized delivery of commodity electricity, are facing pressure from distributed-service models, which promise to deliver the tailored, efficient and connected energy services to power emerging smart-home markets and meet increasingly discerning consumers.

Energy providers have historically enjoyed the luxury of soft customer expectations and narrow demand for services outside of electricity delivery. But this has started to change:

  • Demand-response technology such as Tendril’s “Orchestrated Energy” software uses smart-home tools to analyze power grid load to improve supply-demand efficiencies, saving customers money and reducing costly infrastructure spending for utilities.
  • Subscription and as-a-service models from new companies like Sparkfund and Budderfly remove the constraints of ownership, giving more organizations access to efficiency technology, just as streaming services give more users access to movies or music.
  • Distributed-power models such as ConEdison’s allow customers to generate and manage their own electricity using solar panels and other technology, relieving pressure on the grid and lowering utility customer bills.

The bottom line: To keep up, utilities must restructure service models to deliver more complex distributed-energy services. While some major utilities are making bold investments in the future, the majority of the market is stuck in the past. Unless that changes quickly, historically stable utility stocks are likely in for a rough ride.

Steve McBee is former CEO of NRG Home.

Go deeper

USAID chief tests positive for coronavirus

An Air Force cargo jet delivers USAID supplies to Russia earlier this year. Photo: Mikhail Metzel/TASS via Getty Images

The acting administrator of the United States Agency for International Development informed senior staff Wednesday he has tested positive for coronavirus, two sources familiar with the call tell Axios.

Why it matters: John Barsa, who staffers say rarely wears a mask in their office, is the latest in a series of senior administration officials to contract the virus. His positive diagnosis comes amid broader turmoil at the agency following the election.

Bryan Walsh, author of Future
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COVID-19 shows a bright future for vaccines

Illustration: Annelise Capossela/Axios

Promising results from COVID-19 vaccine trials offer hope not just that the pandemic could be ended sooner than expected, but that medicine itself may have a powerful new weapon.

Why it matters: Vaccines are, in the words of one expert, "the single most life-saving innovation ever," but progress had slowed in recent years. New gene-based technology that sped the arrival of the COVID vaccine will boost the overall field, and could even extend to mass killers like cancer.

5 hours ago - Health

Beware a Thanksgiving mirage

Illustration: Sarah Grillo/Axios

Don't be surprised if COVID metrics plunge over the next few days, only to spike next week.

Why it matters: The COVID Tracking Project warns of a "double-weekend pattern" on Thanksgiving — where the usual weekend backlog of data is tacked on to a holiday.