Three years ago, the nation’s top utility executives gathered at a Colorado resort to hear warnings about a grave new threat to operators of America’s electric grid: not superstorms or cyberattacks, but rooftop solar panels.

SolarCraft workers install solar panels on the roof of a home in San Rafael, Calif. According to a report by the Solar Foundation, the solar industry employs more workers than the coal-mining industry. (Justin Sullivan/Getty Images)

If demand for residential solar continued to soar, traditional utilities could soon face serious problems, from “declining retail sales” and a “loss of customers” to “potential obsolescence,” according to a presentation prepared for the group. “Industry must prepare an action plan to address the challenges,” it said.

The warning, delivered to a private meeting of the utility industry’s main trade association, became a call to arms for electricity providers in nearly every corner of the nation. Three years later, the industry and its fossil-fuel supporters are waging a determined campaign to stop a home-solar insurgency that is rattling the boardrooms of the country’s government-regulated electric monopolies.

The campaign’s first phase—an industry push for state laws raising prices for solar customers—failed spectacularly in legislatures around the country, due in part to surprisingly strong support […]