Case Study on Distributed Generation Rate Options: From Both Sides of the Meter Presented by Douglas Danley at 36th UASEE/IEEE North America Conference 24 September 2018 Washington, DC

My Goal Today Evaluate various residential rate structures using a year’s worth of real data from a residential PV system in Maryland.

My Goal Today Evaluate various residential rate structures using a year’s worth of real data from a residential PV system in Maryland. Each rate is analyzed from both the customer perspective (i.e., total bill)

My Goal Today Evaluate various residential rate structures using a year’s worth of real data from a residential PV system in Maryland. Each rate is analyzed from both the customer perspective (i.e., total bill) and the utility perspective (i.e., distribution revenues)

Solar Rate Structures in the News

Cost of Solar Energy

Cost of Solar Energy 365 Wp x $0.41/Wp $149.65

Cost of Solar Energy $149.65 ÷ 13,028 kWh = Location: Baltimore, MD Single Axis Tracking 25 Year Life 0.8% annual degradation 365 Wp x $0.41/Wp 579 kWh x 25 yrs x 0.9 $149.65 ÷ 13,028 kWh =

Cost of Solar Energy Unit Energy Cost $149.65 ÷ 13,028 kWh = 1.1 ¢/kWh Location: Baltimore, MD Single Axis Tracking 25 Year Life 0.8% annual degradation Unit Energy Cost 365 Wp x $0.41/Wp 579 kWh x 25 yrs x 0.9 $149.65 ÷ 13,028 kWh = 1.1 ¢/kWh

1.1 ¢/kWh

Standard Metering Retail One Meter. Power flows in one direction – from grid to house.

Avoided Cost / FIT / Value of Solar Production Metering Retail Avoided Cost / FIT / Value of Solar Two Meters Power flows in two directions – from PV to grid and from grid to house. Metered at separate rates.

Net Energy Metering Retail One Meter. Power flows in both directions between grid and house. Production is credited at retail rate.

Excess Energy Metering Retail Avoided Cost / FIT / Value of Solar One Meter. Power flows in both directions between grid and house, but there are separate rates for consumption and production.

Zero Export Metering One Meter. Retail No export! One Meter. Power flows in one direction between grid and house. Home automation senses excess and uses within the house to prevent export.

My Residential PV System Location: Germantown, MD Array: 6.89 kWp Inverter: SolarEdge Net Metered usage 3,673 kWh PV generation 7,347 kWh, of which 3,686 kWh was exported to the grid. Net energy usage 11,020 kWh PV contribution 67% of annual household load

Rate Structures To Be Analyzed Baseline Bill (no solar) Retail Net Metering Distributed Energy Buyback / Value of Solar Adjusting the Fixed Cost of Service Demand Charges Time-of-Use Rates Distribution System Charges

Conclusions Increased fixed charges when combined with lower energy charges will disincentivize energy efficiency as well as distributed generation Demand rates and TOU rates will be targets for increasingly advanced home automation combined with residential energy storage “DG surcharges” are likely to be viewed as anti- environmental as well as antagonistic towards customers who choose to install solar Solar costs are still falling and adoption will increase, continuing to change the economics Ratemaking is an difficult challenge and utilities need to look “more than one move ahead”

Doug Danley doug.danley@gmail.com