CPS Energy, the municipal utility of San Antonio, Texas, is pioneering a rooftop solar project that could overcome these barriers. The project, called SolarHost, allows any homeowner in the utility’s territory to apply for free solar panel installation. CPS Energy buys, installs, maintains, and insures the solar panels, and in return the customer leases their rooftop to the utility in exchange for a discounted electricity rate (saving 3 cents for each kilowatt-hour generated by the hosted panels, or about $20 per month on average).... Since SolarHost was announced in October 2015, CPS Energy has already filled its pilot program, receiving enough applications to accommodate over 150 megawatts....
 
Credit: Photograph by Michael Coghlan/Flickr under Creative Commons license

 
 
Commonly, electric utilities operate with a mismatch between fixed and variable costs versus fixed and variable revenues. Policies that reduce electricity sales, such as net-metering, can prevent a utility from recovering its costs, which are largely fixed..

[Generally] municipal utilities rely on variable revenues (think electricity sales) to recover fixed costs (... infrastructure).... Policies such as net-metering [can eat] into the cost recovery for the assets....  Lower-income homeowners can easily participate in SolarHost.... Homeowners don’t have to worry about all of the liabilities and upkeep associated with operating and maintaining their solar panels — since CPS Energy owns the panels....

SolarHost also provides CPS Energy with an ... opportunity to address solar-induced grid instabilities. Utilities must keep the distribution voltage near 120 volts to provide reliable power to their customers. However, conventional grids were not designed with solar in mind, and some solar generation characteristics, such as intermittent output and safety-triggered circuit trips, exacerbate voltage instability.

Solar inverters provide an interface between the electricity generated by solar panels and the electricity used by your home and on the grid. These inverters can be controlled in a way which reduces grid instability, especially if they are[ coordinated] with other inverters....This type of coordination is problematic in a typical distribution grid where each inverter and solar array has a unique, independent owner. With the SolarHost program, however, CPS Energy will own thousands of smart inverters across its grid and could easily control them....

Control of smart inverters might allow CPS Energy to earn additional revenue by providing fast frequency response services to the system operator.

http://blogs.scientificamerican.com/plugged-in/how-to-overcome-the-greatest-barriers-to-rooftop-solar-power/
By Scott Vitter, Thomas Deetjen PhD students at the University of Texas at Austin