TY - GEN
T1 - What is the LCOE of residential solar + battery in the face on increasingly complex utlity rate plans?
AU - Routhier, Alexander F.
AU - Bowden, Stuart G.
AU - Goodnick, Stephen M.
AU - Honsberg, Christiana B.
N1 - Funding Information:
Renewable Energy of the Department of Energy (DOE) under NSF Cooperative Agreement No. EEC-1041895.
Funding Information:
VIII.ACKNOWLEDGMENT This work was primarily supported by the Engineering Research Center (ERC) Program of the National Science Foundation (NSF) and the Office of Energy Efficiency and
Publisher Copyright:
© 2021 IEEE.
PY - 2021/6/20
Y1 - 2021/6/20
N2 - Electric utility rate plans are becoming more complex, making it increasingly difficult to calculate the cost of electricity for residential users. This masks the costs and benefits of residential solar and solar + batteries and sends incorrect price signals to consumers. To our knowledge, the impacts of the costs of complex rate plans on the LCOE of solar and batteries for residential consumers has not been calculated and presented. This paper calculates the LCOE for combinations of solar and batteries, including no solar and/or batteries, examining the impact of effects such as time of use and demand charges.The key results are that more complex rate plans show little economic benefit for solar and battery users and continue to exacerbate the problems (commonly referred to as the "duck curve") which is often given as the main roadblock to renewable expansion. These results are primarily due to electricity charges not directly related to overall energy use. There is an increasing component of fixed charges (either solar-related or applicable to all users), such that reducing the electricity usage from the grid with lower-cost solar electricity does not substantially reduce overall LCOE. These fixed charges also substantially increase the LCOE for smaller electrical loads, in some cases nearly doubling it. The second type of electricity charge giving high rates is a demand charge. For demand charges, eliminating every peak is not feasible, such that the charges from the utility are essentially constant. In addition to discouraging the use of solar, these plans negatively impact the utility, as batteries in residential systems have a beneficial impact on both consumers and utilities, enabling reductions in electricity use during early evening by more than 80%.
AB - Electric utility rate plans are becoming more complex, making it increasingly difficult to calculate the cost of electricity for residential users. This masks the costs and benefits of residential solar and solar + batteries and sends incorrect price signals to consumers. To our knowledge, the impacts of the costs of complex rate plans on the LCOE of solar and batteries for residential consumers has not been calculated and presented. This paper calculates the LCOE for combinations of solar and batteries, including no solar and/or batteries, examining the impact of effects such as time of use and demand charges.The key results are that more complex rate plans show little economic benefit for solar and battery users and continue to exacerbate the problems (commonly referred to as the "duck curve") which is often given as the main roadblock to renewable expansion. These results are primarily due to electricity charges not directly related to overall energy use. There is an increasing component of fixed charges (either solar-related or applicable to all users), such that reducing the electricity usage from the grid with lower-cost solar electricity does not substantially reduce overall LCOE. These fixed charges also substantially increase the LCOE for smaller electrical loads, in some cases nearly doubling it. The second type of electricity charge giving high rates is a demand charge. For demand charges, eliminating every peak is not feasible, such that the charges from the utility are essentially constant. In addition to discouraging the use of solar, these plans negatively impact the utility, as batteries in residential systems have a beneficial impact on both consumers and utilities, enabling reductions in electricity use during early evening by more than 80%.
KW - solar LCOE
KW - solar integration
UR - http://www.scopus.com/inward/record.url?scp=85115945105&partnerID=8YFLogxK
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U2 - 10.1109/PVSC43889.2021.9519070
DO - 10.1109/PVSC43889.2021.9519070
M3 - Conference contribution
AN - SCOPUS:85115945105
T3 - Conference Record of the IEEE Photovoltaic Specialists Conference
SP - 2074
EP - 2078
BT - 2021 IEEE 48th Photovoltaic Specialists Conference, PVSC 2021
PB - Institute of Electrical and Electronics Engineers Inc.
T2 - 48th IEEE Photovoltaic Specialists Conference, PVSC 2021
Y2 - 20 June 2021 through 25 June 2021
ER -