The Impact of Utility Tariff Evolution on Behind-the-Meter PV Adoption
- National Renewable Energy Laboratory (NREL), Golden, CO (United States)
This analysis uses a new method to link the NREL Regional Energy Deployment System (ReEDS) capacity expansion model with the NREL distributed generation market demand model (dGen) to explore the impact that the evolution of retail electricity tariffs can have on the adoption of distributed photovoltaics (DPV). The evolution most notably takes the form of decreased mid-day electricity costs, as low-cost PV reduces the marginal cost of electricity during those hours and the changes are subsequently communicated to electricity consumers through tariffs. We find that even under the low PV prices of the new SunShot targets the financial performance of DPV under evolved tariffs still motivates behind-the-meter adoption, despite significant reduction in the costs of electricity during afternoon periods driven by deployment of cheap utility-scale PV. The amount of DPV in 2050 in these low-cost futures ranged from 206 GW to 263 GW, a 13-fold and 16-fold increase over 2016 adoption levels respectively. From a utility planner's perspective, the representation of tariff evolution has noteworthy impacts on forecasted DPV adoption in scenarios with widespread time-of-use tariffs. Scenarios that projected adoption under a portfolio of time-of-use tariffs, but did not represent the evolution of those tariffs, predicted up to 36 percent more DPV in 2050, compared to scenarios that did not represent that evolution. Lastly, we find that a reduction in DPV deployment resulting from evolved tariffs had a negligible impact on the total generation from PV - both utility-scale and distributed - in the scenarios we examined. Any reduction in DPV generation was replaced with utility-scale PV generation, to arrive at the quantity that makes up the least-cost portfolio.
- Research Organization:
- National Renewable Energy Lab. (NREL), Golden, CO (United States)
- Sponsoring Organization:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE), Renewable Power Office. Solar Energy Technologies Office
- DOE Contract Number:
- AC36-08GO28308
- OSTI ID:
- 1394110
- Report Number(s):
- NREL/PR-6A20-70114
- Country of Publication:
- United States
- Language:
- English
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