The Impact of Retail Rate Structures on the Economics of Commercial Photovoltaic Systems in California Page: 1 of 41
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The Impact of Retail Rate Structures on the Economics of Commercial Photovoltaic
Systems in California
Andrew Mills*, Ryan Wiser, Galen Barbose, William Golove
Ernest Orlando Lawrence Berkeley National Laboratory, 1 Cyclotron Road, MS 90R4000,
Berkeley CA 94720, USA
This article examines the impact of retail electricity rate design on the economic value of
grid-connected photovoltaic (PV) systems, focusing on commercial customers in
California. Using 15-minute interval building load and PV production data from a sample
of 24 actual commercial PV installations, we compare the value of the bill savings across
20 commercial-customer retail electricity rates currently offered in the state. Across all
combinations of customers and rates, we find that the annual bill savings from PV, per
kWh generated, ranges from $0.05/kWh to $0.24/kWh. This sizable range in rate-
reduction value reflects differences in rate structures, revenue requirements, the size of the
PV system relative to building load, and customer load shape. The most significant rate
design issue for the value of commercial PV is found to be the percentage of total utility
bills recovered through demand charges, though a variety of other factors are also found to
be of importance. The value of net metering is found to be substantial, but only when
commercial PV systems represent a sizable portion of annual customer load. Though the
analysis presented here is specific to California, our general results demonstrate the
fundamental importance of retail rate design for the customer-economics of grid-connected,
* Corresponding author. Tel.: +1510 486 4059; fax: +1510 486 6996. E-mail addresses: email@example.com
(A.Mills), firstname.lastname@example.org (R. Wiser), email@example.com (G. Barbose), and firstname.lastname@example.org (W.
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Mills, Andrew; Wiser, Ryan; Barbose, Galen & Golove, William. The Impact of Retail Rate Structures on the Economics of Commercial Photovoltaic Systems in California, article, May 11, 2008; Berkeley, California. (digital.library.unt.edu/ark:/67531/metadc933780/m1/1/: accessed June 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.