Project data
Authors Trevor B. Peffley
Location Michigan, USA
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Grid-tied solar photovoltaic (PV) systems enable lower cost electricity for small and medium size enterprises (SMEs) than they are currently paying for grid electricity in the U.S. These economic realities threaten conventional electric utilities, which have begun manipulating rate structures to reduce the profitability of distributed generation (DG), as well as putting arbitrary caps on DG in their service territories. SMEs may reduce electricity costs, if they can grid defect with hybrid captive power systems made up of solar, battery and generator subsystems. This paper analyzes the technical and economic viability for hybrid solar systems deployed in the commercial sector to enable self-generation. Specifically, for the first time, the economics of grid defection are analyzed for three case studies of SMEs in the northern U.S., which represent a challenging technical case because of long dark winters, but also have high utility costs. The results of the simulations make it clear that grid defection is already viable for SMEs with the current prices for all components in the solar hybrid system. These results were consistent across scale, load-profile, and utility rate. These economic projections included no government incentives or subsidies and can thus be considered extremely conservative for the specific case studies. Policy changes are discussed for electric utilities to avoid the potential of a utility death spiral in this and similar performing locations.

Source[edit | edit source]

Trevor B. Peffley & Joshua M.Pearce. The Potential for Grid Defection of Small and Medium Sized Enterprises Using Solar Photovoltaic, Battery and Generator Hybrid Systems. Renewable Energy. 148, (2020), pp. 193-204. open access

Highlights[edit | edit source]

  • Northern US small & medium size enterprises (SMEs) self generation economics
  • Grid defection via hybrid solar photovoltaic, battery & generator technically viable
  • At current costs grid defection with solar hybrid system profitable
  • Utilities can encourage distributed generation to prevent utility death spiral
  • Grid defection is slightly sensitive to natural gas costs

See also[edit | edit source]

Page data
Part of MOST completed projects and publications
Type Project
Keywords photovoltaics, solar energy, cogeneration, electricity, energy production, heating and cooling, heating, cooling, energy policy, electric utility, photovoltaic, distributed generation, off-grid, hybrid system, battery, grid defection, autoproduction, captive power
SDG Sustainable Development Goal SDG07 Affordable and clean energy
Published 2019
License CC-BY-SA-4.0
Affiliations MOST
Impact Number of views to this page and its redirects. Updated once a month. Views by admins and bots are not counted. Multiple views during the same session are counted as one. 681
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