If you have all of that expense, and suddenly people have solar panels so pay $0 for an energy bill - do you see the problem? The actual cost of fuel/generation is very small compared to the fixed costs.
The more people use solar, the more in the red the utility becomes. You can 'fix' this by making it so every home has a fixed 'connection cost' and then a smaller 'usage cost' on top, but that destroys the incentive for solar panels - they'd never break even for the average buyer.
Solar is great, fantastic even. But it should be done centrally, or people will have to get used to the idea that they will never pay themselves off and are just doing it for the environment.
Australia is giving free power to everyone during the day because they have so much.
More solar is a great thing.
> must be connected to the grid.
That's a legislative problem. If a home can prove it can produce enough electricity for itself, it should not be forced to be connected.
> You can 'fix' this by making it so every home has a fixed 'connection cost' and then a smaller 'usage cost' on top
A lot of places already do this.
Also: Even if half of a neighborhood doesn't need the connection, the work ends up being similar. It's more based on distance/area.
(still good news, as most of Canada's electric generation is low carbon hydro, and the rest of fossil generation can be pushed out with storage and renewables, although I do not have a link handy by province how much fossil generation needs to be pushed out)
As an example:
I live in New England. We do not have enough natural gas pipeline capacity to meet demand in long periods of very cold weather, and have very limited natural gas storage that can't buffer that for as long as a cold spell can last.
In these periods of time the grid traditionally keeps the lights on by switching over a significant portion of the grid to burning oil for power, and/or with the occasional LNG tanker load into Everett MA. These are both....pretty terrible and expensive solutions.
Burning less natural gas during the day still helps at night/at peak, because it means there's been less draw-down of our limited storage/more refill of it during the day, so we don't have to turn to worse options as heavily at night.
There still needs to be enough power to supply to all those homes in the event of a protracted time where solar is unavailable. It gets less applicable as homes start to get multi-day battery banks installed, but those are incredibly rare since they are too expensive.
The whole "wealthy homeowners get subsidized solar and then effectively free backup power paid for by everyone else" needs to end.