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ID: 175240

Demand charge savings from solar PV and energy storage / Darghouth, Naïm R

Darghouth, Naïm R	Journal Article
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Summary/Abstract

With an increasing number of jurisdictions considering alternatives to net metering policies to financially compensate behind-the-meter solar photovoltaics (PV), customer economics will increasingly depend on its ability to reduce demand charges. Understanding these demand charge savings from PV—and how behind-the-meter storage can potentially enhance those savings—is essential to understand PV market dynamics and adoption in the coming years. This article explores how these demand charge savings vary with demand charge designs and customer load profiles, modeled for a variety of residential and commercial customers. Our findings indicate that demand charge savings are lowest under a basic, non-coincident demand charge design where the demand charge is based on the maximum demand level over the month, regardless of timing, resulting primarily from the temporal mismatch between the timing of the PV host's demand peak and PV generation. PV provides greater demand charge savings, for both commercial and residential customers, when demand charge designs are based on predefined, daytime peak periods or longer averaging intervals. Demand charge savings from PV combined with storage are almost always greater than the sum of the savings attained through either technology separately. We also explore how well demand charge savings from PV align with corresponding utility savings.

Key Words

Photovoltaics ; Retail Rate Design ; Demand Charges

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ID: 180165

Importance of peak pricing in realizing system benefits from distributed storage / Lavin, Luke; Apt, Jay

Apt, Jay	Journal Article
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A fundamental policy question for distributed energy resources (DER) is whether they create system benefits shared by all utility customers in addition to being profitable for the installing customer. This question has received considerable attention in “value of DER” and net metering reform proceedings for behind-the-meter solar photovoltaics in recent years. Commercial customer-sited lithium-ion batteries with a primary use case of demand charge management are forecast to greatly increase in the coming decade due to falling storage costs, making comparison of their customer and system benefits a timely topic in DER valuation. We conduct an overview of the system benefits of standalone commercial customer-sited storage on United States’ electric tariffs and find system benefits will not be realized for many standalone commercial customer-sited storage installations in the absence of incentives for storage dispatch during the top 50–100 annual hours that drive grid infrastructure investment. Regulatory implementation of default peak pricing during a small subset of annual hours for customer-sited storage can realize additional system benefits and offer Pareto improvement. Additional transparency in regulatory estimates of these system benefits helps catalyze longer-term visions for increased competition at the retail level using DERs.

Key Words

Avoided Costs ; Critical Peak Pricing ; Demand Charges

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