Solar net metering increases utility-supplier profit margins

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Net metering is an incentive that is essential to most solar photovoltaic systems. Recently the burden placed upon local utilities is an issue some regulators have been asked to address. This research uses actual 2013 and 2014 solar production data from nearly 200 sites, wholesale electricity day-ahead pricing data, and utility-wide demand data. This is all analyzed by the hour for two full years for a western Pennsylvania based utility and an eastern Pennsylvania based utility and their wholesale generators. Results show electricity is 15% more valuable when solar PV systems are generating power and feeding the grid during good weather conditions than at night or cloudy days when solar customers get energy back from the grid. Solar energy generation is highly predictable in the dayahead market, and leads to suppression in market prices for electricity. Thus to reveal the true impact of this market suppression, an increased solar renewable portfolio standard (RPS) fraction of 0.2 to 10% was simulated. This caused a decrease in demand resulting in a corresponding reduction in the price of electricity yielding savings to the utility. The maximum rate of increase and decrease in the utility-wide load did not change significantly until the solar RPS exceeded 5%. Additionally, the demand for electricity was reduced during the highest load hours of the year that corresponded to the most expensive hours of the year. The minimum base-load of the year was decreased substantially for solar RPS of 5% or greater and the base load reaches zero for solar RPS over 10%. From the data of these two years, it is demonstrated that an increased use of solar energy would lead to savings that are larger than the loss in revenue due to having fewer traditional non-solar customers. Thus electricity suppliers and utilities stand to have both higher profits and higher profit margins when customers adopt net-metered solar energy compared to the non-adoption of solar energy.

Original languageEnglish (US)
Title of host publicationBiofuels, Hydrogen, Syngas, and Alternate Fuels; CHP and Hybrid Power and Energy Systems; Concentrating Solar Power; Energy Storage; Environmental, Economic, and Policy Considerations of Advanced Energy Systems; Geothermal, Ocean, and Emerging Energy Technologies; Photovoltaics; Posters; Solar Chemistry; Sustainable Building Energy Systems; Sustainable Infrastructure and Transportation; Thermodynamic Analysis of Energy Systems; Wind Energy Systems and Technologies
PublisherAmerican Society of Mechanical Engineers
ISBN (Electronic)9780791850220
DOIs
StatePublished - 2016
EventASME 2016 10th International Conference on Energy Sustainability, ES 2016, collocated with the ASME 2016 Power Conference and the ASME 2016 14th International Conference on Fuel Cell Science, Engineering and Technology - Charlotte, United States
Duration: Jun 26 2016Jun 30 2016

Publication series

NameASME 2016 10th International Conference on Energy Sustainability, ES 2016, collocated with the ASME 2016 Power Conference and the ASME 2016 14th International Conference on Fuel Cell Science, Engineering and Technology
Volume1

Other

OtherASME 2016 10th International Conference on Energy Sustainability, ES 2016, collocated with the ASME 2016 Power Conference and the ASME 2016 14th International Conference on Fuel Cell Science, Engineering and Technology
CountryUnited States
CityCharlotte
Period6/26/166/30/16

All Science Journal Classification (ASJC) codes

  • Renewable Energy, Sustainability and the Environment
  • Energy Engineering and Power Technology
  • Fuel Technology

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