Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers
Abstract
The financial interests of U.S. utilities are poorly aligned with customer-sited solar photovoltaics (PV) under traditional regulation. Customer-sited PV, especially under a net-metering arrangement, may result in revenue erosion and lost earnings opportunities for utility shareholders as well as increases in average retail rates for utility ratepayers. Regulators are considering alternative regulatory and ratemaking approaches to mitigate these financial impacts. We performed here a scoping analysis using a financial model to quantify the efficacy of mitigation approaches in reducing financial impacts of customer-sited PV on utility shareholders and ratepayers. We find that impacts can be mitigated through various incremental changes to utility regulatory and business models, though the efficacy varies considerably depending on design and particular utility circumstances. Based on this analysis, we discuss tradeoffs policymakers should consider, which ultimately might need to be resolved within broader policy contexts.
- Authors:
-
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Publication Date:
- Research Org.:
- Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
- Sponsoring Org.:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office
- OSTI Identifier:
- 1506241
- Alternate Identifier(s):
- OSTI ID: 1247787
- Grant/Contract Number:
- AC02-05CH11231
- Resource Type:
- Accepted Manuscript
- Journal Name:
- Energy Policy
- Additional Journal Information:
- Journal Volume: 85; Journal ID: ISSN 0301-4215
- Publisher:
- Elsevier
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 29 ENERGY PLANNING, POLICY, AND ECONOMY; 14 SOLAR ENERGY; customer-sited PV; utility regulation; decoupling; shareholder incentives; rate design
Citation Formats
Satchwell, Andrew, Mills, Andrew, and Barbose, Galen. Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers. United States: N. p., 2015.
Web. doi:10.1016/j.enpol.2015.05.019.
Satchwell, Andrew, Mills, Andrew, & Barbose, Galen. Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers. United States. https://doi.org/10.1016/j.enpol.2015.05.019
Satchwell, Andrew, Mills, Andrew, and Barbose, Galen. Wed .
"Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers". United States. https://doi.org/10.1016/j.enpol.2015.05.019. https://www.osti.gov/servlets/purl/1506241.
@article{osti_1506241,
title = {Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers},
author = {Satchwell, Andrew and Mills, Andrew and Barbose, Galen},
abstractNote = {The financial interests of U.S. utilities are poorly aligned with customer-sited solar photovoltaics (PV) under traditional regulation. Customer-sited PV, especially under a net-metering arrangement, may result in revenue erosion and lost earnings opportunities for utility shareholders as well as increases in average retail rates for utility ratepayers. Regulators are considering alternative regulatory and ratemaking approaches to mitigate these financial impacts. We performed here a scoping analysis using a financial model to quantify the efficacy of mitigation approaches in reducing financial impacts of customer-sited PV on utility shareholders and ratepayers. We find that impacts can be mitigated through various incremental changes to utility regulatory and business models, though the efficacy varies considerably depending on design and particular utility circumstances. Based on this analysis, we discuss tradeoffs policymakers should consider, which ultimately might need to be resolved within broader policy contexts.},
doi = {10.1016/j.enpol.2015.05.019},
journal = {Energy Policy},
number = ,
volume = 85,
place = {United States},
year = {Wed Jun 10 00:00:00 EDT 2015},
month = {Wed Jun 10 00:00:00 EDT 2015}
}
Web of Science