Solar San Diego: The Impact of Binomial Rate Structures on Real PV Systems; Preprint

There is confusion in the marketplace regarding the impact of solar photovoltaics (PV) on the user's actual electricity bill under California Net Energy Metering, particularly with binomial tariffs (those that include both demand and energy charges) and time-of-use (TOU) rate structures. The City of San Diego has extensive real-time electrical metering on most of its buildings and PV systems,with interval data for overall consumption and PV electrical production available for multiple years. This paper uses 2007 PV-system data from two city facilities to illustrate the impacts of binomial rate designs. The analysis will determine the energy and demand savings that the PV systems are achieving relative to the absence of systems. A financial analysis of PV-system performance undervarious rate structures is presented. The data revealed that actual demand and energy use benefits of binomial tariffs increase in summer months, when solar resources allow for maximized electricity production. In a binomial tariff system, varying on- and semi-peak times can result in approximately $1,100 change in demand charges per month over not having a PV system in place, an approximate 30%cost savings. The PV systems are also shown to have a 30%-50% reduction in facility energy charges in 2007.