The study Electricity Bill Savings from Residential PV Systems states PV savings’ forecasts based on a fixed, unchanging rate of electricity compensation are unrealistic when the retail price of energy can be affected by several factors and new technologies, the scale of renewables penetration and different forms of metering all interact.
By comparing a reference case of the current electricity generation mix in California with numerous other scenarios, the study, by the Lawrence Berkeley National Laboratory, found a rise in penetration of solar into the grid would reduce the savings available to householders on a time of use (TOU) compensation scheme.
In the current situation, TOU households benefit because peak solar generation hours coincide with the peak hours of grid, non-solar, demand, ensuring the compensation paid for solar electricity at such times brings a large return. But if solar plays a bigger part in the energy mix, the peak demand periods for non solar current will inevitably move outside peak solar generation times, reducing the compensation for photovoltaic system owners.
The report’s authors are quick to acknowledge that the scenario could be radically different in less benign climates than California.
However, it is not all gloom for solar, because the study found that higher deployment of grid storage; demand and response; and CSP with storage, would ensure the price of electricity is maintained at peak solar generation periods with the added benefit that the increased cost of rolling out such technologies raises electricity bills, therefore increasing savings for photovoltaic households.
The report also found photovoltaic households that consume a lot of energy can make significant savings under the increasing block pricing (IBP) system, which works on the principle that the more electricity is consumed, the higher the compensation paid. The study’s authors found solar households could make as much as 102% more savings using IBP than under a standard flat rate.
The report also found that under virtually all alternative electricity market conditions, the savings from household photovoltaics compensated at a flat rate with net metering would rise the notable exception being a significant fall in the price of gas, which would reduce household savings 4%.