The Impact of Rate Design and Net Metering on the Bill Savings from Distributed PV for Residential Customers in California Naïm Darghouth, Galen Barbose, Ryan Wiser Lawrence Berkeley National Laboratory April 2010 This analysis was funded by the Office of Energy Efficiency and Renewable Energy (Solar Energy Technologies Program) and the Office of Electricity Delivery and Energy Reliability (Permitting, Siting, and Energy Analysis Department � � Electricity Markets and Policy Group � � Analysis Division) of the U.S. Department of Energy
Project Overview Context and Motivation: � Net metering has proliferated in the U.S., and has been instrumental in jump-starting the distributed PV market � Challenges to net metering have been raised in a number of states and contexts � The implications of transitioning to alternative compensation mechanisms are complex and not well-understood Project Scope: Focusing on residential customers of the two largest electric utilities in California (PG&E and SCE) (1) Examine the impact of retail rate design and related factors on the value of bill savings from PV under net metering (2) Compare the value of the bill savings between net metering and several alternative compensation mechanisms Energy Analysis Department � � Electricity Markets and Policy Group � � 2
The Scope and Implications of the Analysis Are Necessarily Limited This analysis presents the value of bill savings from distributed PV, across a diverse set of residential customers. However, it: � Cannot be generalized to other states and utilities, given the unique characteristics of PG&E and SCE residential electricity rates � Cannot be directly applied to the general population of PG&E and SCE residential customers, or to the actual population of PG&E and SCE residential customers with PV, given differing customer characteristics from our sample � Does not consider the overall cost-effectiveness of distributed PV, and does not address the value of distributed PV to the utility, non-participating ratepayers, or society-at-large � Does not consider any factors other than the value of the bill savings when comparing net metering to potential alternative compensation mechanisms Energy Analysis Department � � Electricity Markets and Policy Group � � 3
Data Sources and Methods � 15-minute load data from 215 single-family homes in PG&E and SCE territories, extending over one year � Matched customer load data with simulated hourly PV production using nearby weather station data for the same time period � Estimated customer electricity bills with and without PV systems - On each currently-available retail tariff option (flat rate and TOU rates) - PV sized to meet varying percentages (25%, 50%, 75%) of annual consumption; termed PV-to-load ratio - With varying PV panel orientations (south-facing, southwest-facing, flat) - Under net metering and three alternate compensation schemes � Under each scenario, bill savings expressed in terms of annual reduction in utility bill per kWh generated ($/kWh) Energy Analysis Department � � Electricity Markets and Policy Group � � 4
PG&E and SCE Default Residential Rates Have Steeply Inclining Usage Tiers � Default residential tariffs for $0.6 Marginal Electricy Price both utilities have increasing $0.5 block pricing with 5 usage $0.4 ($/kWh) tiers $0.3 � Tiers defined as percentage $0.2 PG&E E-1 of baseline allotment, which $0.1 SCE D varies by climate zone $0.0 0% 100% 200% 300% 400% 500% - Most customers in our sample Consumption within Billing Period are in Tier 3 or Tier 4 (percent of baseline) � Both utilities have relatively steep tiers compared to elsewhere in the U.S., but PG&E’s tiering is particularly steep - PG&E: $0.12 (baseline/Tier 1) to $0.47/kWh (Tier 5) - SCE: $0.12 (baseline/Tier 1) to $0.28/kWh (Tier 5) Energy Analysis Department � � Electricity Markets and Policy Group � � 5
PG&E and SCE Also Offer Residential TOU Rates � PG&E’s residential TOU rate has five usage tiers within each TOU period (same as default tariff) � SCE’s residential TOU rate has only two tiers within each TOU period, with a large increase in the summer on-peak price when usage >130% of baseline $0.8 $0.8 PG&E E-6 Sum. On SCE TOU-D-T Marginal Electricity Price ($/kWh) Marginal Electricity Price ($/kWh) $0.7 $0.7 Sum. On Sum. Part $0.6 $0.6 $0.5 $0.5 SCE D $0.4 $0.4 PG&E E-1 Wint. Part $0.3 $0.3 Sum. Off $0.2 $0.2 Wint. On $0.1 $0.1 Wint. Off Wint. Off Sum. Off $0.0 $0.0 0% 100% 200% 300% 400% 500% 0% 100% 200% 300% 400% 500% Consumption within Billing Period Consumption within Billing Period (percent of baseline) (percent of baseline) Energy Analysis Department � � Electricity Markets and Policy Group � � 6
Average Size of Customers in Sample Differs from the Relevant Customer Populations Figure compares the size of customers � Average monthly consumption in the sample to the overall population of customers in the sample: of residential customers and to net- 734 kWh/month (PG&E) and metered residential customers 824 kWh/month (SCE) � This is larger than average Sample mean Utility mean (2007) NEM customers size of the overall population of 1,600 Average Consumption per residential customers: Customer (kWh/month) 1,400 564 kWh/month (PG&E) and 1,200 591 kWh/month (SCE) 1,000 � But customers in the sample 800 600 are smaller , on average, than 400 the actual population of net- Note: box plot shows 200 metered residential customers: 10/25/50/75/90 percentiles 0 1,148 kWh/month (PG&E) PGE (N=118) SCE (N=97) 1,434 kWh/month (SCE) Energy Analysis Department � � Electricity Markets and Policy Group � � 7
Within the Customer Sample, Monthly Usage Typically Reaches Tier 3 or Tier 4 � In more than half of Figure shows the percentage of customer- all customer- months in which consumption reaches (but months, usage does not exceed) each of the five usage tiers reaches Tier 3 or 40% Tier 4 PG&E Percentage of Individual Customer- SCE 35% � The distribution for Months within Each Tier 30% the SCE customers 25% in our sample is 20% skewed more 15% towards high-usage 10% tiers, with almost 25% of SCE 5% customer-months 0% 1 2 3 4 5 reaching Tier 5. Tier Level Energy Analysis Department � � Electricity Markets and Policy Group � � 8
Usage During the Summer Peak TOU Period is Typically a Small Percentage of Total Usage � Customer rate choice Figure shows the distribution, across between flat and TOU customers in the sample, of the options is driven in large percentage of annual consumption part by peak-period occurring within each TOU period usage � In the median case, Percent of Annual Consumption 60% 9.4% of PG&E PG&E SCE customers’ annual usage 50% Note: Box plots identify in Each TOU Period 10th/25th/50th/75th/90th and 9.8% of SCE 40% percentile values customers’ annual usage 30% occurs during the 20% summer on-peak period. 10% � However, many 0% customers’ load profiles On- Part- Off- Part- Off- On- Off- On- Off- are either more or less Peak Peak peak Peak peak Peak peak Peak peak concentrated during the Summer Winter Summer Winter summer on-peak period. Energy Analysis Department � � Electricity Markets and Policy Group � � 9
PV Generation is More Concentrated During Summer Peak Period Than Customer Usage South facing Flat Southwest facing Customer Load (Median) 50% Percent of Annual PV Generation / Customer Load in Each TOU Period Figure shows the 45% PG&E SCE median percentage of 40% 35% annual PV generation 30% occurring within each 25% TOU period, for several 20% 15% PV orientations, 10% compared to customer 5% consumption 0% Peak Part- Off- Part- Off- Peak Off- Peak Off- peak peak peak peak peak peak Summer Winter Summer Winter � The base-case analysis assumes south-facing PV panels at 25°tilt, but two alternate PV orientations considered as sensitivities (southwest at 25° tilt and flat) � Depending on PV orientation, the percentage of PV generation occurring during summer peak period ranges from 23-29% for PG&E and 24-31% for SCE Energy Analysis Department � � Electricity Markets and Policy Group � � 10
TOU Becomes Increasingly Attractive at Higher PV Penetration Levels � Throughout our analysis, we assume Figure shows the percent of customers choose the least-cost rate, customers that would be both with and without a PV system better off on the TOU rate � Without a PV system, the TOU rate is than on the “flat” rate, at least-cost for almost none of the PG&E varying PV-to-load ratios customers, and ~50% of the SCE 100% customers which TOU Rate is Least Cost 90% Percent of Customers for 80% � Increasing PV generation 70% disproportionately offsets peak period 60% consumption, making the TOU rate 50% progressively more attractive at high PV- 40% 30% to-load ratios 20% PGE (N=118) � At a 75% PV-to-load ratio, the TOU rate is SCE (N=97) 10% least cost for ~80% of the PG&E 0% 0% 25% 50% 75% customers and ~100% of SCE customers PV-to-Load Ratio Energy Analysis Department � � Electricity Markets and Policy Group � � 11
Recommend
More recommend
