Customer economics of residential photovoltaic systems: Sensitivities to changes in wholesale market design and rate structures

Darghouth, Naïm R.; Wiser, Ryan H.; Barbose, Galen

doi:10.1016/j.rser.2015.10.111

Title: Customer economics of residential photovoltaic systems: Sensitivities to changes in wholesale market design and rate structures

Journal Article · Tue Nov 10 23:00:00 EST 2015 · Renewable and Sustainable Energy Reviews

DOI: https://doi.org/10.1016/j.rser.2015.10.111 · OSTI ID:1508054

Darghouth, Naïm R. ^[1]; Wiser, Ryan H. ^[1]; Barbose, Galen ^[1]

Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)

We report that the customer economics of U.S. residential photovoltaics (PV) often depend on retail electricity rates, because most utilities compensate customer-sited PV generation via net metering. The future bill savings from net metering are uncertain and dependent on retail rate structures, wholesale market design, and renewable penetration levels, among other factors. We explore the impact of the following assumptions on the bill savings from residential PV: a wholesale electricity market design with a price cap (as opposed to an energy-only market); a retail rate with a fixed customer charge (as opposed to a fully volumetric rate); and increasing-block pricing (as opposed to a non-varying flat rate). A wholesale price cap can dampen the expected bill-savings erosion due to moving from a low to a high renewables scenario for customers with time-varying rates and net metering. Moving from a fully volumetric rate to a two-part tariff rate with a fixed customer charge could severely Erode the bill savings under net metering, because PV generation could only displace the (reduced) volumetric portion of the rate. Lastly, increasing-block pricing might have an even greater impact on the bill savings from behind-the-meter PV than the other uncertainties explored in this paper.

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Research Organization:: Lawrence Berkeley National Laboratory (LBNL), Berkeley, CA (United States)

Sponsoring Organization:: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office; USDOE Office of Electricity (OE)

Grant/Contract Number:: AC02-05CH11231

OSTI ID:: 1508054

Journal Information:: Renewable and Sustainable Energy Reviews, Journal Name: Renewable and Sustainable Energy Reviews Journal Issue: C Vol. 54; ISSN 1364-0321

Publisher:: ElsevierCopyright Statement

Country of Publication:: United States

Language:: English

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29 ENERGY PLANNING, POLICY, AND ECONOMY
electricity rate design
net metering
photovoltaics

Title: Customer economics of residential photovoltaic systems: Sensitivities to changes in wholesale market design and rate structures

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