Solar+Storage/Impact of Utility Rate Design

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Impact of Rate Design on Solar+Storage Economics


Key Questions

  • How does the design of the utility tariff, such as demand charges and time-of-use elements, impact solar and/or storage economics?
  • Do expected savings from solar and/or storage increase when utility rates have higher demand charges?

Results

  • Solar and/or storage systems are more likely to be economical under utility tariffs that have:
    • demand charges (of any type), or
    • time-of-use elements (including time-of-use energy rates or time-of-use demand charges).
  • Solar and/or storage systems are more likely to be economical under utility tariffs that
  • As the maximum demand charge of the utility tariff increases, one may expect expected savings to also increase.
  • Looking across all locations, building types and technology combinations, once technology prices drop to Cost Point D, expected savings do increase with increasing demand charges.
  • When considering only projects that include battery storage, expected savings do not necessarily trend upward with increasing demand charges. The trend is highly dependent on location and building type.



Rate Types Modeled


View Cost Point Definitions