The Impact of Retail Rate Structures on the Economics ofCustomer-Sited PV: A Study of Commercial Installations inCalifornia

We analyze the impact of retail rate design on the economics of grid-connected commercial photovoltaic (PV) systems in California. The analysis is based on 15-minute interval building load and PV production data for 24 commercial PV installations in California, spanning a diverse set of building load shapes and geographic locations. We derive the annual bill savings per kWh generated for each PV system, under each of 21 distinct retail rates currently offered by the five largest utilities in California. We identify and explain variation in the value of bill savings attributable to differences in the structure of demand and energy charges across rates, as well as variation attributable to other factors, such as the size of the PV system relative to building load, the specific shape of the PV production profile, and the customer load profile. We also identify the optimal rate for each customer, among those rates offered as alternatives to one another, and show how the decision is driven in large measure by the size of the PV system relative to building load. The findings reported here may be of value to regulators and utilities responsible for designing retail rates, as well as to customers and PV retailers who have a need to estimate the prospective bill savings of PV systems