Funding Program: SuNLaMP
SunShot Subprogram: Soft Costs
Location: Lawrence Berkeley National Laboratory, Berkeley, CA
SunShot Award Amount: $1,200,001
This project assesses emerging and innovative options for aligning high distributed photovoltaic (PV) deployment with utility shareholder and ratepayer interests. The team is evaluating the potential for bankable demand charge savings and identifying best practices for incorporating solar into resource planning studies. Through this combination of targeted analyses and stakeholder engagement, the project empowers key decision-makers to alleviate market barriers in order to increase deployment and lower business risks and market inefficiencies that inflate soft costs.
Approach
This project team will summarize historical and projected retail electricity rate trends and compare the potential rate impacts of distributed PV against other drivers for changes in retail electricity rates. The team will then illustrate, in an innovative but easy-to-understand way, the long-term hedge value of solar in mitigating natural gas price risk. Next, the team will conduct an analysis to identify demand-charge design options and technology configurations that provide the opportunity for distributed PV customers to realize bankable demand-charge savings that align well with underlying utility cost savings. Finally, they will identify and demonstrate best practices and innovative tools for incorporating solar energy into resource planning studies conducted by utilities and by distribution and transmission system operators.
Innovation
This project will help regulators better gauge the true significance and scale of potential distributed PV impacts on retail electricity rates and to budget their resources accordingly. It will also provide a new and innovative framework for showing solar’s hedge value, which will benefit financiers, utility planners, and policymakers. The analysis from this project will inform utility and regulatory staff of the potential for demand charge rates to provide bill savings for distributed PV customers. By sharing the results of this project with stakeholders, this work will drive innovations in the treatment of solar within resource-planning studies, ultimately enabling greater realization of solar’s value within the procurement processes that those studies inform.