Utility Rate Switch Modeling Capabilities

The rate modeling engine in SAM currently does not take in to account the rate before solar or the rate a customer would otherwise be on if they did not go solar. This is a critical flaw given that fact that some of the largest commercial solar markets in the nation exist in utility territories where energy consumers have the option to switch to rates that are structured for solar specifically. Without this modeling capability, it is impossible for SAM to accurately model the potential savings or avoided rate provided by the generation facility.

Example:

Let's say a SAM user had a customer that was on a rate that cost them $50,000 annually for their energy bill. The user knows the switching this customer to a rate that without solar would cost the customer $70,000 annually, but with a correctly sized PV system will only cost them $5,000. Now becuase they are modeling this with SAM, which only takes into account the rate after solar, they would showing the customer a year one savings of $65,000. However, in all reality, if this customer did not go solar, they would not have switched rates and thus would only have spent $50,000 in the year SAM is claiming they are saving $65,000.

If SAM were to integrate this rate switching feature in to its modeling capabilities, SAM would likely become my standard tool for a production and rate modeling.

Dear Jacob,

Your observation is partially correct. When you model a system with the residential or commercial financial model and specify an electric load, SAM calculates the project's revenue with and without the renewable energy system to determine the renewable energy system's value in cents/kWh. However, SAM assumes that the "without system" project would purchase electricity at the same buy rate(s) as the "with system" project. In other words, to calculate the cost of electricity to meet the electric load with no renewable energy system, SAM applies the buy rates you specify on the Utility Rate page.

In the Metrics table on the Results page, the "Total revenue without system" is the annual dollar amount that would be required to meet the electric load with no renewable energy system. The "Total revenue with system" is the annual net value of electricity generated by the system and delivered to the grid. The "First Year Net Revenue" is the difference between the two.

I will pass on your comment to the development team.

Best regards,
Paul.

Dear Paul,

I remain confused on this critical issue also. The correct "net metering rate" to use are the rates/costs to be saved by running the meter backwards. Consumption at the highest rates should be discounted first, then the 2nd highest rate, etc.

The verbiage on the "utility rates" page does not seem to be consistent with your description above.
There appear to be three choices to specify the "net metering" buyback rate:
1. "Sell at tiered sell rate", which is a single-value input. This does not accomplish your statement.
2. "Sell at tier 1 rate for each tier structure". This option appears to select the LOWEST rate for each month to credit the net metering. This would not accomplish your statement.
3. "Sell at the lowest rate for each tier structure". This option would appear to be no different than #2.

I have also read all of the help documentation and it has not clarified the question for me.

I assume that there is a verbiage disconnect. Could you advise with what settings SAM accomplishes your statement or my equivalent statement in the first paragraph above?

Thank you,
Tom

Regarding Jacob's observation, would it not be possible to construct two different cases within SAM, one with the PV-specific rate structure and one without? This would give two analyses: one on the original rate structure and one on the new one, but otherwise identical. With some manual effort, it should then be possible to compare the two cases you describe.

Regards,

Steve

Hi Tom,

Your description is correct, assuming that the Tier 1 rate is the lowest rate, which it typically would be.

In the next version of SAM, we've made some changes on the Utility Rate page. You will be able to specify both a buy and sell rate for each tier.

We've just posted a Beta test version on the Downloads page. If you would like to have a look at the new Utility Rate page, please install the Beta version (you can install the Beta version without interfering with any other versions of SAM on your computer) and let me know if the changes address your concern, or if you have any suggestions for improving it.

Best regards,
Paul.

Hi Steve,

Yes. You can compare the value of two renewable energy systems that use different rate structures by modeling them separately -- using cases to do that in SAM is a convenient way to see both systems in the same file. You could create one case with a flat rate and the building's electric load to see the "total revenue without system" value for the base scenario, and a second case with the same load data and the renewable-specific rate structure to see the "total revenue with system."

Best regards,
Paul.