1. Rate Design &
Distributed PV:
A Complex Debate
That Must Evolve
Jim Kennerly
Principal Analyst
Sustainable Energy Advantage, LLC
2. About Sustainable Energy
Advantage, LLC
Renewable energy consulting and advisory firm
focused on the Northeast
Services include: renewable energy market, policy,
financial & strategic analysis, due diligence
Recent engagements include:
MA Net Metering and Solar Task Force
NY Large-Scale Renewables (LSR) Program Development
RI Renewable Energy Growth Program
Various consulting projects and subscription services for private
clients (including but not limited to):
3. Why Is Good Rate Design
Important?
It needs to affordably convey the value of grid service
to customers, and allow utilities to profitably offer it.
It needs to convey the value of reasonable “alternatives
to service” that permit resource efficiency.
So…what if it doesn’t?
Excessive volumetric charges could undervalue aspects of
utility service, and (if there’s enough solar/DER) bankrupt
the utility.
Excessive fixed charges could undervalue alternatives to
service, and thus resource efficiency, and (if the rates have
a big enough fixed charge) could bankrupt solar/DER
companies.
4. Distributed PV: A Clash of
Cost/Benefit Perspectives
(Utilities/Allies) Distributed solar
is unfair for a subset of customers
that cannot “afford” it, and shifts
costs to these customers because
the “value of solar” is less than
the retail rate.
(Solar Advocates/Industry) Not
enough at the retail rate, because
the “value of solar” meets or
exceeds the retail rate
5. Why the Debate Must Evolve From
“Either/Or” to “Both/And”
Role of Solar/Wind in the Clean Power Plan’s “Clean Energy Incentive
Program”
Declining traditional incentives, declining load & load factor
New distributed energy resource (DER) technology & the advent of
“Demand Flexibility”
The immense social value of DER soft cost reduction
Changes in solar value to grid/society with higher penetrations
The Bottom Line: Change means that utility rates
must reflect a new standard of fully-loaded DER value
that enables a transition to a sustainable, value-
creating DER market.
6. So…how do we get there?
Key Point from Getting to
Yes:
Focus on interests, not
positions.
Mick Jagger Translation:
You can’t always get what you
want…but if you try sometimes,
you might find you get what you
need.
