Strange behavior from peak load and demand charge

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pherende
Strange behavior from peak load and demand charge

I'm seeing some strange behavior from the peak load and demand charges in a model I'm running for a residential solar PV system. The PV clearly reduces the peak load (As it should, and confirmed in the monthly profiles). However, in the data table results the monthly demand charge is the same with and without the system. At the same time, the peak load with the system shows as 0. As a test I ran a similar, simple system that gave correct results. Not sure what's going on. I don't want to rule out operator error, but I can't find it.

File attached. For what it's worth, this is actually a commercial system, but I've modeled it as residential as the business involved is a not-for-profit and so doesn't pay taxes. It's a cash system at this point, so I'm not worried about the financing.

Thanks

Paul Gilman

Hello,

Thank you for including the SAM file with your post. That made it easier for me to understand your question.

For the "All generation sold at sell rate(s) and all load purchased at buy rate(s)" option for accounting for excess generation, SAM models the system as if it has two separate electricity meters: One to measure electricity generated by the system, which all goes directly to the grid, and one which measures electricity from the grid which is equal to the load. For a rate with a flat buy and sell rates like yours at $0.077/kWh, the monthly energy charge is calculated like this:

Sales ($/mo) = Monthly Energy (kWh/mo) * Sell Rate ($/kWh)

Purchases ($/mo) = Electricity Load (kWh/mo) * Buy Rate ($/kWh)

Energy Charge with System ($/mo) = Purchases ($/mo) - Sales ($/mo)

In your file, for January, the energy charge is:

2,144.82 kWh/mo * $0.077/kWh - 38,086 kWh/mo * $0.077/kWh = $2,767.47

The demand charge is not affected by the PV system because the grid supplies all of the power required by the load. In your case, the monthly demand rate is a flat $10.008/kW, so for January with its peak load of 70.76 kW, the demand charge with the system is:

70.76 kW * $10.008/kW = $708.134

That is the same demand charge for the "without system" scenario, so the system does not reduce demand charges.

If you want to model a situation where the system does reduce the demand charge, you should choose one of the other "monthly accounting of excess generation" options. Because for your project, the monthly load is always much larger than the PV system's output, the first four options should result in the same monthly bill, so you could choose any of them.

As for your decision to model the project using the Residential financial model, you could also have used the Commercial model and set the federal and state income tax rates to zero. Either approach should give the same results. The differences between the Residential and Commercial models are:

  • Residential model has option for standard loan with no interest deduction for tax purposes. Commercial model assumes debt interest is tax deductible. If you set the income tax rates to zero, both options are equivalent.
  • Commercial model has option for accelerated depreciation, which does not apply if the income tax rates are set to zero.

Best regards,
Paul.

pherende

That totally makes sense, thank you. That also makes sense to just set tax rates to 0 for not-for-profits as well.

I appreciate the support here,

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