Net Metering PV Distributed Resources Benefits All Stakeholders on PJM
Abstract
This research documents that all stakeholders (utilities, shareholders, customers – participants and nonparticipants, society, etc.) benefit from the electric utility policy of net metering of photovoltaics at the distribution level on PJM. It is important to share this objective data given the current political activity across the nation which inaccurately represents that the net-metering policy is somehow harmful to the utility and its customers. The papers finding to the contrary is based upon analysis of real data from locational marginal pricing across the RTO and at specific nodes within it. While one would expect that power generated during the day for a summer peaking utility is of more value to the electric utility system (since demands tend to be relatively higher at that time) this research documents the difference in PV generation LMP to non-generation LMP on a daily, seasonal and annual basis. Further, the value of photovoltaic capacity is not zero since very often PV systems make a significant contribution at the time of the PJM summer utility system peaks. This paper evolves from multiple other research studies which analyzed similar capacity and energy values coincident with PV generation over the past decade but uses the most recent data available which is affected by lower energy and capacity values in general due to the economic downturn. Apart from the obvious benefits that utility customers accrue by being able to use the grid as virtual storage via the net-metering policy this paper looks at the nearest neighbor impact, the distribution feeder impact, capacity planning requirements, the utility system as a whole, the ISO/RTO, as well as all other ratepayers. In all categories net-metering provides positive benefits to all these stakeholders and at present poses no significant burdens or costs onto the utility system or other ratepayers. The research finds that, in fact, PV system owners provide a positive economic value to the grid for which they are presently inadequately compensated. It is clear that electric utility regulators in 42 states, D.C. and multiple territories are aware of this positive benefit accruing to all electric utility stakeholders since they continue to support net metering as an important public policy support for solar technology. This research provides important objective economic assessment data that they can use to defend their current policies.
Keywords
Net metering, Pjm, Photovoltaics, Electric utility, Stakeholders, Locational marginal price (lmp), Regulator