Customers with rooftop solar lower the system peak demand, thus reducing the need for costly generation and transmission capacity: Rooftop solar is worth 24¢/kWh in Michigan study. Incentives for daytime use (time of renewables or real-time TOU) are needed

Articles by Will Driscoll in PV Magazine

Rooftop solar is worth 24¢/kWh in the Michigan territory served by Consumers Energy, well above the 14¢ to 17¢/kWh that the utility’s net metering customers currently receive for the electricity they send to the grid.

The Solar Energy Industries Association’s Director of Rate Design Kevin Lucas presented that finding in testimony in a Consumers Energy rate case.

Lucas concluded that rooftop solar “outflow energy” is “more valuable than average energy,” and that residential customers with solar are less costly to serve than other residential customers. A key factor in the high value of rooftop solar, Lucas noted, is the “much lower” demand of customers with rooftop solar at the time of the system peak demand, compared to similar customers without solar. That means that customers with rooftop solar lower the system peak demand, thus reducing the need for costly generation and transmission capacity.

Rooftop solar customers, Lucas testified, also export much of their power during the utility’s “critical peak” hours of 2-6 p.m. on weekdays. He noted that the utility offers a “critical peak pricing” rate for residential customers designed to reduce afternoon demand on days when the utility calls a CPP event—when customers on that rate must pay 95¢/kWh for afternoon power.

Lucas proposed that Michigan regulators establish residential rates in a way that shares the savings created by rooftop solar, between those who own rooftop solar and other residential customers. He suggested that the savings be allocated 25% to rooftop solar owners, to incentivize further solar installations, and 75% to other residential customers, to drive residential rates down.

Lucas challenged a number of approaches used in a Brattle study that the utility used to show the cost of serving residential customers who have solar. He concluded that state regulators “should disregard the Brattle study upon which [the utility] relies.” Lucas describes his critique of the utility’s analysis, and presents his own analysis, in 68 pages of testimony.

Value of solar

Several organizations that jointly filed Lucas’s testimony, as well as testimony from other experts, recommended that Michigan regulators “initiate a comprehensive statewide study into the value of solar,” testified William Kenworthy, Vote Solar’s regulatory director for the Midwest.

Dr. Gabriel Chan, a University of Minnesota professor who testified in his personal capacity, suggested that Minnesota’s approach to a value of solar analysis could be a useful model.

The joint testimony was filed by the Environmental Law & Policy Center, on its own behalf and on behalf of the Ecology Center, the Great Lakes Renewable Energy Association, SEIA, and Vote Solar.

Real-time pricing (Time of Renewables) that integrates more solar power is proven to work in California

Industry participants noted the significance of a real-time pricing project on a single distribution circuit in California. State officials are evaluating real-time pricing as a means to help integrate more solar and wind power on the grid. JUNE 30, 2020 WILLIAM DRISCOLL

A California project team offering customers real-time pricing of electricity has shown that the technology it developed works, and that customers shifted air conditioning load to periods of high solar generation, when electricity prices were lowest. The California Energy Commission funded the project largely to demonstrate real-time pricing as a means to integrate increasing levels of renewable generation.

The project was technically complex. “Developing all the technical capabilities to calculate the prices and communicate them to such a wide range of devices is great work,” said Scott Murtishaw, senior advisor with the California Solar & Storage Association (CALSSA). “It sets a nice foundation for real-time pricing options for customers across California.”

The project, reaching 115 households and businesses on a single distribution circuit served by the utility SCE, was executed by Universal Devices and TeMix, in collaboration with SCE. An image developed by TeMix indicates the data, hardware and software involved.

Participating customers reduced their electric bills mostly by shifting air conditioning loads. “During the peak price hour, the customer’s air conditioner was typically off as a result of pre-cooling before the peak price hour,” explained TeMix CEO Dr. Edward Cazalet, who was lead author of a report on the project.

The response of air conditioners and heat pumps to price signals, “when implemented at scale, should have a major benefit to the grid in terms of reduced investment in flexible generation, especially with 100 percent clean energy,” says the report.

The 18-month pilot project also enabled customers to manage the timing of electric vehicle charging and battery storage operation.

“The big takeaway from this pilot is that it demonstrates that transactive energy systems can modify the timing of loads and can be implemented in a cost-effective way for both the consumer and the utility,” said Dynamic Grid CEO Kay Aikin. Dynamic Grid is developing a real-time pricing pilot based on different technology, for a microgrid serving Isle au Haut, a Maine coastal island.

Customer option

CalSSA in April called for state regulators to require the utility SDG&E to make real-time pricing an option in the San Diego area, after the group’s earlier call for a statewide option was tabled by regulators. “We’ve argued in our filings,” said Murtishaw, “that this is the time to make real-time pricing available, because the capability is there, and increasingly so as we electrify transportation and residential end uses, besides the rapidly increasing adoption of storage.” CALSSA’s main interest, he noted, is to “enable customers to get more value out of storage.

The pilot project team designed the technology with scalability in mind, the report says. “All California independently operated utilities, community choice aggregators, and municipal utilities can develop projects” based on the piloted technology, say the authors, and the technology “can be scaled to many millions of customers.”


The report is chock-full of technical information, plus cost projections.

The real-time prices offered to customers participating in the pilot had four components, beginning with the real-time wholesale locational marginal price. Two other components, designed to preserve resource adequacy, were described as “scarcity-based dynamic price adders” for “base generation plus flex generation.” The fourth price component was a real-time distribution price, to recognize the capacity constraint of the distribution circuit.

A fixed monthly fee on each customer’s bill covered SCE’s per-customer costs for billing and other expenses.

The technical architecture of the device interactions is shown in the image below, developed by Universal Devices.

The pilot project team calls its real-time pricing system RATES, for Retail Automated Transactive Energy System. The California Energy Commission published the report, titled “Complete and Low-Cost Retail Automated Transactive Energy System (RATES).”

Ron Sinton’s Testimony in Boulder CO Argues for Time of Renewables

Boulder has 60MW of rooftop PV, with the intention to exceed 100MW.  As Mayor Weaver pointed out, this is the energy equivalent of 30MW continuous power compared to our requirement of 150MW.  Since PV is mostly produced during 8 hours per day, it means that Boulder power will be 60% PV during daytime on average.  On weekends and many days during the year, Boulder will have more PV than it can use.  Yet, between sunset and sunrise, Boulder will be using about 75% fossil fuel since the wind does not blow every hour of every night.  In a few years, by about 2023, this will drop to 45% fossil fuel at night as Xcel installs more wind.  It becomes more difficult to add renewables beyond this point.  When the wind is not blowing at night, adding more wind and solar does not replace fossil fuel.  This problem could be best addressed at both a system and local level.

Xcel will have the exact same problem at the same time.  When it hits 55% renewables, each new MWH of PV or Wind will only replace about 0.6 MWH of fossil fuel (by my calculations) since much of the new renewable power will be produced when there are already enough renewables.  Anyone proposing that we should simply “buy more renewables” needs to realize that the low prices that have been bid in $/MWH are only relevant if you can use the power exactly when it is generated which is only easy for penetrations less than 60%.  If you have to store the renewables for use later, the cost of this renewable and stored electricity may be about 3X higher. Batteries have a very important role in high-value applications, but lower-cost large-scale storage will play a bigger role as it is developed. The way forward is not limited by the willingness to simply buy more wind and solar power plants.  It is limited by the ability to cost-effectively integrate these into a system that will meet the demand 24/7/365.

The challenge of moving from 55% renewable to carbon free is a completely different problem from going from 0-55%.  It is as much a matter of changing how and when energy is used as it is choosing which power plants to install.  This makes a city like Boulder more of an equal partner in the fastest, lowest-cost potential solutions.  It is also a good reason why it makes sense to turn a new page.  We can see if there is anything to learn from the last 16 years that is relevant to next 10, make a note of it, and then quickly move on.  We need to look forward and not backwards.  This is why the timing is right.

Step 1.  Boulder should clarify its goal.  “100% renewables” means different things to different people.  It could be better than 80% CO2 reduction by 2030 or it could be worse.  Boulder should state its goal as carbon reduction relative to the 2005, in lbs. CO2/MWH.  Boulder and Xcel need the same terminology.

Step 2.  To integrate inexpensive PV, Boulder could shift power use towards daytime so that PV can be easily integrated into the system at the lowest cost.  This would benefit Xcel’s entire grid.

Step 3.  To integrate cheap wind, Boulder could shift energy use to the windy hours on windy nights, in preference to calm periods.  This would provide a benefit to Xcel.

Step 4.  If Boulder energy use patterns enable higher penetration of renewables, then Boulder customers should see a benefit in the rates and faster progress towards meeting climate goals.

Step 5.  Boulder can incentivize beneficial electrification based on all of the low-cost clean energy, buying more electricity while decarbonizing the transportation, heating, cooling and industrial sectors.

The tools already exist to implement this.  Xcel could provide renewable day-ahead, week ahead forecast.  Boulder could incentivize flexible demand that responds to these signals.  Xcel can implement rates that reward the demand flexibility that uses the cleanest, cheapest power at the right times of each day. I can imagine many more synergies. Xcel and Boulder staff no doubt have a long list.  A main conclusion of all of the modeling studies for renewable systems that I have seen is that having more options and more flexibility in the energy system always gives a lower overall cost.


SEIA finds rooftop solar is worth 24¢/kWh in Michigan

The value of rooftop solar is well above the net metering compensation paid to customers with rooftop solar, the solar association found.JUNE 29, 2020 WILLIAM DRISCOLL 3

Southeast states to add nearly 15 GW of solar by 2023

South Carolina is set to surpass North Carolina in solar watts per customer. Georgia and Florida will exceed the Southeast average, while utilities in Tennessee, Alabama and Mississippi will continue to lag. Overall the states will reach 5% solar generation by 2023.JUNE 24, 2020 WILLIAM DRISCOLL

Advocates seek solar on all new houses in ten states

“The most efficient time to install solar panels is when the builders are on the roof in the first place,” said Bronte Payne with Environment America.JUNE 23, 2020 WILLIAM DRISCOLL 3

Solar opportunities ‘ignored’ across 100 million acres in the Southwest

The Bureau of Land Management “has ignored most possibilities” for utility-scale solar “on its vast land holdings across the solar-rich Southwest,” says a paper. Renewable energy development accounts for less than 1% of economic activity on BLM lands, while oil and gas account for 70%, according to BLM data.JUNE 17, 2020 WILLIAM DRISCOLL

Solar hosting capacity maps must be accurate to be useful

Solar hosting capacity maps, now required in seven states, show where solar can be added on a distribution circuit without incurring any grid expense—but only if those maps are accurate. California’s experience, says a policy paper, shows that best practice guidelines for validating maps are needed to aid state regulators.JUNE 16, 2020 WILLIAM DRISCOLL 1

SEIA calls on FERC to dismiss the petition to end net metering

The Solar Energy Industries Association makes the case for the Federal Energy Regulatory Commission to dismiss the petition, solely on legal grounds. A filing by Solar United Neighbors, Vote Solar and other groups makes a legal case and also rebuts the petition’s claims about net metering.JUNE 15, 2020 WILLIAM DRISCOLL 1

90% clean power by 2035 is ‘challenging but feasible’

“90% by 2035 is the sweet spot” for a pathway that uses existing technology, allows “judicious use” of existing generation assets, and “achieves near-complete decarbonization in a realistic timeframe,” said study co-author Nikit Abhyankar of UC Berkeley. The resulting lower wholesale cost of electricity by 2035 “was a surprise for us.”JUNE 11, 2020 WILLIAM DRISCOLL 1

First Solar backs carbon pricing for wholesale electricity

First Solar has backed carbon pricing in comments submitted to the Federal Energy Regulatory Commission. The firm also co-founded a global policy institute that supports carbon pricing as a “cost-effective, equitable and politically viable climate solution.”JUNE 8, 2020 WILLIAM DRISCOLL 1

PV plants lasting longer, with lower operational costs

Solar plants are now expected to last 32.5 years and have operational costs of $17 per kW/year, as shown by a Berkeley Lab survey of industry participants.JUNE 3, 2020 WILLIAM DRISCOLL

Cities ‘could generate hundreds of times more solar power than they do today’

While applauding the rooftop solar progress of dozens of cities, a report from Environment Texas offers policy options for further progress. Per capita solar leaders are Honolulu, San Diego, Albuquerque, San Jose and Burlington, Vermont.JUNE 1, 2020 WILLIAM DRISCOLL

Replacing peakers with storage to achieve the greatest health benefit

Regulators and community groups can use a new interactive resource to see the emissions impacts of existing and proposed peaker units. Storage developers may also find the tool helpful, to identify peakers likely to be replaced.MAY 22, 2020 WILLIAM DRISCOLL 4

Overbuilding solar at up to 4 times peak load yields a least-cost all-renewables grid

The global energy firm Wartsila found a least-cost renewables mix for the U.S. that involves overbuilding renewable capacity, but requires no seasonal storage, and needs only four to ten days of multi-day storage capacity. The analysis modeled meeting current uses of electricity, based on projected technology costs for 2030.MAY 14, 2020 WILLIAM DRISCOLL 17

Distributed storage could save Texas $344 million per year by deferring transmission and distribution costs

Adding enough distributed storage to reduce peak demand by 20% could defer up to one-fifth of the transmission and distribution expenditures in Texas for about 10 years, a study found. Other states may find the study’s analytical insights to be useful.MAY 11, 2020 WILLIAM DRISCOLL 1

SEIA calls for strengthening PURPA

About 9.3 GW of solar projects have come online thanks to the law known as PURPA. The national solar association argues that federal rules implementing PURPA “should be strengthened rather than weakened,” to ensure that solar facilities up to 80 MW may compete in every region of the country.MAY 7, 2020 WILLIAM DRISCOLL