Evaluating utility benefits of custom owned and sited photovoltaics

Abstract

There is growing interest in grid-connected, customer owned solar photovoltaic (PV) systems and considerable disagreement about how to determine the value of grid- connected PV. The solar industry asserts that utilities should support customer-sited PV systems because of the high correlation between solar energy production and peaking loads. Some utilities maintain that a utility realizes no net benefit from PV above wholesale value of the electricity because the utility must still maintain adequate infrastructure to meet the PV owner’s peak demand. This paper evaluates the benefits of solar energy delivered by customer owned and sited PV systems on a monetary basis from the utility’s perspective by examining the capacity of the solar resource to deliver during times of high spot market prices. The analysis is completed for the Minneapolis Saint Paul electricity market using a single PV system’s electricity production data correlated with regional wholesale pricing data to identify whether PV can reduce utility exposure to spot market pricing, thereby creating value to the utility to purchase power from solar producers.