Electricity distribution tariffs and distributed generation: Quantifying cross-subsidies from consumers to prosumers

Picciariello, Angela; Vergara, Claudio; Reneses, Javier; Frías, Pablo; Söder, Lennart

doi:10.1016/j.jup.2015.09.007

Cited by 100 publications

(52 citation statements)

References 17 publications

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“…The price net metering customers are paid-and the structure of the rest of the tariff, such as the inclusion of demand charges-continues to be the subject of contention among utilities, customers, and public utility commissions. Of particular concern is potential cross-subsidization of net metering customers by other customers when the former are paid at the retail price [13]. Valuing the net benefit of solar PV is perhaps the critical issue in these debates.…”

Section: Introductionmentioning

confidence: 99%

Was it worthwhile? Where have the benefits of rooftop solar photovoltaic generation exceeded the cost?

Vaishnav

Horner

Azevedo

2017

Environ. Res. Lett.

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We estimate the lifetime magnitude and distribution of the private and public benefits and costs of currently installed distributed solar PV systems in the United States. Using data for recentlyinstalled systems, we estimate the balance of benefits and costs associated with installing a nonutility solar PV system today. We also study the geographical distribution of the various subsidies that are made available to owners of rooftop solar PV systems, and compare it to distributions of population and income. We find that, after accounting for federal subsidies and local rebates and assuming a discount rate of 7%, the private benefits of new installations will exceed private costs only in seven of the 19 states for which we have data and only if customers can sell excess power to the electric grid at the retail price. These states are characterized by abundant sunshine (California, Texas and Nevada) or by high electricity prices (New York). Public benefits from reduced air pollution and climate change impact exceed the costs of the various subsidies offered system owners for less than 10% of the systems installed, even assuming a 2% discount rate. Subsidies flowed disproportionately to counties with higher median incomes in 2006. In 2014, the distribution of subsidies was closer to that of population income, but subsidies still flowed disproportionately to the better-off. The total, upfront, subsidy per kilowatt of installed capacity has fallen from $5200 in 2006 to $1400 in 2014, but the absolute magnitude of subsidy has soared as installed capacity has grown explosively. We see considerable differences in the balance of costs and benefits even within states, indicating that local factors such as system price and solar resource are important, and that policies (e.g. net metering) could be made more efficient by taking local conditions into account.3

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Section: Introductionmentioning

confidence: 99%

Was it worthwhile? Where have the benefits of rooftop solar photovoltaic generation exceeded the cost?

Vaishnav

Horner

Azevedo

2017

Environ. Res. Lett.

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“…The increasing penetration of distributed generation (DG) and the deployment of the smart grid concept supported by state-of-the-art information and communication technologies 3,4 allow the LV consumers to play an active role in the DS. 5 By producing their own energy through DGs 6 and by managing their energy use through demand response (DR), 7 consumers are gradually becoming an active demand (AD). Under this condition, simplified modeling of the uncertainties related with DG generation and the consumers' behavior is no longer a valid approach.…”

Section: Motivationmentioning

confidence: 99%

Load modeling of active low‐voltage consumers and comparative analysis of their impact on distribution system expansion planning

Neto

Abaide

Miranda

et al. 2019

Int Trans Electr Energ Syst

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Summary This paper proposes a new probabilistic model for active low‐voltage prosumers suitable for distribution expansion planning studies. The load uncertainty of these consumers is considered through a range of load profiles by segmenting the energy consumption according to the different energy uses. Then, consumption adjustments are simulated using a nonhomogenous Poisson process based on the energy usage preferences and the financial gains according to the tariff scheme. A case study based on the modified IEEE 33‐Bus test system with real data collected from a Brazilian distribution company is performed in order to analyze the impact of the load profiles in scenarios with high penetration of renewable distributed generation (DG). The experiments carried out reveal that considerable monetary savings in the expansion of the distribution grid can be achieved for this case study (up to 37%) as compared with the alternative with no active demand (AD) by exploiting the flexibility associated with the active behavior of prosumers as a response to price signals and/or by permitting adequate levels for the integration of DG into the distribution grid.

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“…A substantial part of the potential distributional impacts of prosumage is related to its interaction with grid charges (see Picciariello et al 2015, andBardt et al 2014 for the specific situation in Germany).…”

Section: Distributional Impactsmentioning

confidence: 99%

“…Such net metering schemes, which net grid feed-in and grid consumption over a specified period and, thus, work with a single meter, were introduced in California (Borenstein 2015) and several EU countries (European Commission 2015). Picciariello et al (2015) quantify crosssubsidies from prosumagers to consumers for twelve stylized US networks and find that these may become substantial, particularly in lower-density grids.…”

Section: Introductionmentioning

confidence: 99%

Prosumage of Solar Electricity: Pros, Cons, and the System Perspective

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in January 2017Abstract: We examine the role of prosumage of solar electricity, i.e. PV self-generation combined with distributed storage, in the context of the low-carbon energy transformation. First, we devise a qualitative account of arguments in favor of and against prosumage. Second, we give an overview of prosumage in Germany. Prosumage will likely gain momentum as support payments expire for an increasing share of PV capacities after 2020. Third, we model possible system effects in a German 2035 scenario. Prosumage batteries allow for a notable substitution of other storage facilities only if fully available for market interactions. System-friendly operation would also help limiting cost increases. We conclude that policymakers should not unnecessarily restrict prosumage, but consider system and distributional aspects.

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Electricity distribution tariffs and distributed generation: Quantifying cross-subsidies from consumers to prosumers

Cited by 100 publications

References 17 publications

Was it worthwhile? Where have the benefits of rooftop solar photovoltaic generation exceeded the cost?

Was it worthwhile? Where have the benefits of rooftop solar photovoltaic generation exceeded the cost?

Load modeling of active low‐voltage consumers and comparative analysis of their impact on distribution system expansion planning

Prosumage of Solar Electricity: Pros, Cons, and the System Perspective

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