On the Path to SunShot - Utility Regulatory Business Model Reforms forAddressing the Financial Impacts of Distributed Solar on Utilities

Technical Report · Sun May 01 04:00:00 EDT 2016

DOI:https://doi.org/10.2172/1343477· OSTI ID:1343477

Net-energy metering (NEM) with volumetric retail electricity pricing has enabled rapid proliferation of distributed photovoltaics (DPV) in the United States. However, this transformation is raising concerns about the potential for higher electricity rates and cost-shifting to non-solar customers, reduced utility shareholder profitability, reduced utility earnings opportunities, and inefficient resource allocation. Although DPV deployment in most utility territories remains too low to produce significant impacts, these concerns have motivated real and proposed reforms to utility regulatory and business models, with profound implications for future DPV deployment. This report explores the challenges and opportunities associated with such reforms in the context of the U.S. Department of Energy’s SunShot Initiative. As such, the report focuses on a subset of a broader range of reforms underway in the electric utility sector. Drawing on original analysis and existing literature, we analyze the significance of DPV’s financial impacts on utilities and non-solar ratepayers under current NEM rules and rate designs, the projected effects of proposed NEM and rate reforms on DPV deployment, and alternative reforms that could address utility and ratepayer concerns while supporting continued DPV growth. We categorize reforms into one or more of four conceptual strategies. Understanding how specific reforms map onto these general strategies can help decision makers identify and prioritize options for addressing specific DPV concerns that balance stakeholder interests.

• Research Organization: EERE Publication and Product Library
• Sponsoring Organization: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Solar Energy Technologies Program (EE-4S) (Solar Energy Technologies Program Corporate)
• OSTI ID: 1343477
• Report Number(s): NREL/TP--6A20-65670 LBNL--1004371; 7614
• Country of Publication: United States
• Language: English

Related Subjects

14 SOLAR ENERGY
solar
regulatory reforms
business models
distributed solar
utilities