A new study released this week by Acadia Center quantifies the grid and societal benefits of solar photovoltaic systems (solar PV) in Massachusetts. Establishing the value of distributed resources like rooftop solar is increasingly important as states explore ways to meet energy needs and deploy clean energy resources.
Acadia Center assessed the value of six hypothetical solar PV system configurations to better understand the overall value that solar PV provides to the grid. The assessment determined that the value of solar to the grid—and ratepayers connected to the grid—ranges from 22-28 cents/kWh, with additional societal values of 6.7 cents/kWh. This value derives from solar PV’s unique ability to produce clean energy and, among other benefits, avoid generation and related emissions from conventional power plants. The overall grid value of solar is the sum total of these different benefits.
Acadia Center also evaluated the impact of orientation (i.e. west- or south-facing arrays with different tilts from the horizontal) on the value of solar PV, which is why six different system configurations were examined. One key finding is that under traditional net metering, west-facing arrays—which maximize output during periods of peak demand like late afternoon—would receive approximately 20% less credit than a comparable south-facing system, despite the fact that they produce approximately the same overall value to the grid. The study finds that solar PV provides broader societal advantages (such as environmental benefits from avoided greenhouse gas emissions and other pollutants) which should be considered when assessing costs and benefits and determining additional incentives for solar producers.
The implications and policy recommendations of the report include the following key points:
- Solar generation is a valuable local energy resource that provides significant benefits to all ratepayers, with a per-kWh value in excess of retail rates. Further, in the aggregate, net metering is a fair policy.
- Once sufficiently high levels of solar PV are installed, a “value of solar” tariff could correct discrepancies between the individual elements– for example, avoided energy or transmission and distribution costs – of the value of solar and of retail rates. In such a tariff, solar PV generation is credited at an administratively determined rate and the individual value components can be accounted for properly (e.g. distribution portion of benefits paid by distribution companies).
- Current policies can discourage the installation of west-facing systems. For customers who cannot install south-facing solar, new policies that recognize the value of west-facing solar (maximizing output during peak demand periods) could be beneficial for both ratepayers and society.
- Societal benefits should be calculated when assessing the costs and benefits of solar PV and determining additional solar producer incentives.
- Locational values (the added value from solar that reduces grid congestion and avoids expensive upgrades to the distribution system) have not been considered in this study, but are important to maximize the savings in distribution costs that solar can bring to ratepayers. Appropriate incentives can ensure that solar PV, energy efficiency, and other customer-side resources are targeted to defer or avoid the need for new infrastructure spending.
The Value of Solar report has been released in time to provide information for the work of the Net Metering and Solar Task Force in Massachusetts, which will conclude its work at the end of April.
Additional rate design recommendations in Acadia Center’s UtilityVision