The Potential for Grid Defection of Small and Medium Sized Enterprises Using Solar Photovoltaic, Battery and Generator Hybrid Systems: Difference between revisions

Revision as of 00:43, 10 December 2019

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.

https://doi.org/10.1016/j.renene.2019.12.039 [open access]

Highlights

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

Abstract

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.

Keywords

Energy policy; Electric utility; Photovoltaic; Distributed generation; off-grid; Solar energy; hybrid system; battery; grid defection; autoproduction; captive power

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-[[image:grid-defect.jpg|right|300px]]
+[[image:Grid-defect-biz.png|right|300px]]
 ==Source==
-* Abhilash Kantamneni, Richelle Winkler, Lucia Gauchia, Joshua M. Pearce, [http://dx.doi.org/10.1016/j.enpol.2016.05.013 Emerging economic viability of grid defection in a northern climate using solar hybrid systems]. ''Energy Policy'' '''95''', 378–389 (2016). doi: 10.1016/j.enpol.2016.05.013 [https://www.academia.edu/25363058/Emerging_Economic_Viability_of_Grid_Defection_in_a_Northern_Climate_Using_Solar_Hybrid_Systems free open access]
+* 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''.
-** Summary: J. Pearce. [http://www.huffingtonpost.com/joshua-pearce/consumers-can-profit-from_b_10230420.html Consumers Can Profit from Leaving the Grid]. ''Huffington Post Green'' 5.31.2016.
+https://doi.org/10.1016/j.renene.2019.12.039 [open access]
+==Highlights==
+* 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
 ==Abstract==
-[[image:upmap.jpg|right]]High demand for [[photovoltaic]] (PV), battery, and small-scale [[combined heat and power]] (CHP) technologies are driving a virtuous cycle of technological improvements and cost reductions in off-grid electric systems that increasingly compete with the grid market. Using a case study in the Upper Peninsula of Michigan, this paper quantifies the economic viability of off-grid PV+battery+CHP adoption and evaluates potential implications for grid-based utility models. The analysis shows that already some households could save money by switching to a solar hybrid off-grid system in comparison to the effective electric rates they are currently paying. Across the region by 2020, 92% of seasonal households and ~75% of year-round households are projected to meet electricity demands with lower costs. Furthermore, ~65% of all Upper Peninsula single-family owner-occupied households will both meet grid parity and be able to afford the systems by 2020. The results imply that economic circumstances could spur a positive feedback loop whereby grid electricity prices continue to rise and increasing numbers of customers choose alternatives (sometimes referred to as a “utility death spiral”), particularly in areas with relatively high electric utility rates. Utility companies and policy makers must take the potential for grid defection seriously when evaluating energy supply strategies.
+[[image:upmap.jpg|right]] 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.
 ==Keywords==
-[[Energy policy]]; Electric utility; [[Photovoltaic]]; [[Distributed generation]]; [[off-grid]]; [[Solar energy]]
+[[Energy policy]]; Electric utility; [[Photovoltaic]]; [[Distributed generation]]; [[off-grid]]; [[Solar energy]]; hybrid system; battery; grid defection; autoproduction; captive power
 ==See also==

Main topics	Solar energy Solar power Photovoltaics (Research) Concentrated solar power Solar thermal energy Photovoltaic solar thermal Passive solar
Technologies	Solar cooker (Projects) Solar hot water system (Projects) Solar still (Projects) Solar dehydrator (Projects) Greenhouse (Projects) Solar water disinfection (Projects) Photovoltaic systems Photovoltaic devices