Jackson Free Press

ATLANTA (AP) — The Southern Co. is brainstorming ways it could more widely incorporate renewable energy, particularly solar power, into its traditional business model, CEO Thomas Fanning said this week.

The southeast utility has assembled a brainstorming team tasked with considering how renewable energy technology might be used in coming years if its costs continue falling and solar panels become more efficient at producing power, Fanning told shareholders during an annual meeting. An initial report is expected later this summer.

Those technologies could challenge the business models long used by major power utilities. Southern Co. relies on large, centralized fossil fuel and nuclear power plants to provide the majority of its electricity for customers. But in the future, there could be broader moves to place smaller renewable systems in many places, a strategy called distributed generation.

Distributed generation poses financial questions for utility monopolies that traditionally make profits as they spend money to build, operate and maintain the massive infrastructure needed to generate power.

Fanning said no final decisions have been made and the company could explore many models. For example, he said Southern Co. could give people who have solar panels on their homes a credit on their electric bills or payments in return for their electricity. However, the utility executive said those customers should still pay to compensate the utility for the cost of connecting a home to the electric grid and for providing backup power at night and when solar panels do not work.

"Otherwise, and what we've seen in other places in the United States, you in effect have a de facto subsidy of rich people putting solar panels on their roof and having lower-income families subsidize them," Fanning said in response to a question from a shareholder. "We've got to make sure it's fair for everybody."

Under another approach, Southern Co. might pay homeowners to lease space so it can install its own solar equipment.

Company officials said multiple questions must still be resolved, including deciding who would be responsible for maintaining solar equipment, who would be liable should it fail and deciding how the deals might be financed.