Estimating the Value of Improved Distributed Photovoltaic Adoption Forecasts for Utility Resource Planning

Misforecasting the adoption of customer-owned distributed photovoltaics (DPV) can have operational and financial implications for utilities - forecasting capabilities can be improved, but generally at a cost.This paper informs this decision-space by quantifying the costs of misforecasting across a wide range of DPV growth rates and misforecast severities. Using a simplified probabilistic method presented within, an analyst can make a first-order estimate of the financial benefit of improving a utility's forecasting capabilities, and thus be better informed about whether to make such an investment. For example, we show that a utility with 10 TWh per year of retail electric sales who initially estimates that the increase in DPV's contribution to total generation could range from 2 percent to 7.5 percent over the next 15 years could expect total present-value savings of approximately $4 million if they could keep the severity of successive five-year misforecasts within +/- 25 percent. We also have more general discussions about how misforecasting DPV impacts the buildout and operation of the bulk power system - for example, we observed that misforecasting DPV most strongly influenced the amount of utility-scale PV that gets built, due to the similarity in the energy and capacity services offered by the two solar technologies.