Impacts of Commercial Electric Utility Rate Structure Elements on the Economics of Photovoltaic Systems

This analysis uses simulated building data, simulated solar photovoltaic (PV) data, and actual electric utility tariff data from 25 cities to understand better the impacts of different commercial rate structures on the value of solar PV systems. By analyzing and comparing 55 unique rate structures across the United States, this study seeks to identify the rate components that have the greatest effect on the value of PV systems. Understanding the beneficial components of utility tariffs can both assist decision makers in choosing appropriate rate structures and influence the development of rates that favor the deployment of PV systems. Results from this analysis show that a PV system's value decreases with increasing demand charges. Findings also indicate that time-of-use rate structures with peaks coincident with PV production and wide ranges between on- and off-peak prices most benefit the types of buildings and PV systems simulated. By analyzing a broad set of rate structures from across the United States, this analysis provides an insight into the range of impacts that current U.S. rate structures have on PV systems.