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Solar Plus: A Holistic Approach to Distributed Solar PV

A new NREL report analyzes “solar plus,” an emerging approach to distributed solar photovoltaic (PV) deployment that uses energy storage and controllable devices to optimize customer economics.

Illustration titled "The Solar Plus Home," showing depicting  the relationship between a rooftop solar photovoltaic system on a home and other technologies: a smart air-conditioning unit, battery storage, a smart domestic water heater, and an electric vehicle. The top left shows a home with rooftop solar panels and the text "Solar panels generate energy during the day, when most homeowners are not home." The top right shows a cutaway of the inside of the home with a bathroom, kitchen, bedroom, and utility closet, with the text "There are a number of controllable appliances, like hot water heaters and air conditioners, that can be used to store energy during the day." The bottom left shows the same home, along with an electric vehicle with a plug and batteries, and the text "With the addition of EVs and batteries, even more of that energy can be stored." The center of the image shows the solar-powered home with a plus sign and arrows connecting to electric transmission wires, and the text "Solar Plus looks at how more energy can be used in the home, which helps utilities better manage the grid."

Changes in electricity rate structures could make distributed PV adoption less economically attractive to customers. Several states and utilities have implemented or proposed policies to move away from net metering and have developed new residential time-of-use rate structures that affect the customer value of PV generation. At the same time, increasing PV adoption has raised concerns about the variability of PV generation and its impact on the electricity grid. These issues have prompted the PV industry to consider new ways to optimize the customer value of distributed PV systems.

This report develops the "solar plus" concept as an approach to optimizing how PV interacts with other electricity loads at the household level and the grid more broadly. Solar plus has the potential to increase value from the customer's perspective by combining PV with technologies such as controllable domestic water heaters, controllable air-conditioning (AC) units, batteries, and electric vehicles. These types of smart home devices can be programmed to maximize the use of PV electricity rather than grid electricity, allowing customers to shift more of their electricity load to earlier in the day, when their PV systems generate the most electricity, which would reduce their use of grid-supplied electricity. Solar plus also has the potential to help mitigate some grid-level issues associated with large-scale PV deployment. By shifting more peak period loads earlier in the day, solar plus could smooth energy demand throughout the day. Applying the solar plus concept more broadly could reduce peak period ramping requirements and thus reduce strain on the grid.

The report uses NREL’s Renewable Energy Optimization (REopt™) model to explore "solar plus" economics under various utility rate structures and net metering rates in five case studies. REopt deploys different configurations of PV, controllable AC units, controllable domestic water heaters, and batteries, in response to different rate structures and customer electricity use profiles. Other technologies such as electric vehicles will be incorporated into future studies.

Findings

The analysis indicates that solar plus improves the customer economics of PV relative to standalone solar. REopt deploys at least one solar plus technology in addition to PV in all case studies. Solar plus increases the net present value of the customer’s total investment by about a factor of three, on average, across the five case studies.

The results of the analysis have four primary implications that are detailed in the full report:

  • Solar plus increases system value.
  • Solar plus generally affects the optimal PV system size.
  • Solar plus may mitigate some negative impacts of declining net metering rates and evolving rate structures on PV economics.
  • Current utility rate structures and battery costs generally do not support battery deployment based on customer bill savings alone.

Learn More

This research is the second of three NREL studies on distributed PV plus storage. The first study provides cost benchmarking for residential solar plus storage systems. The third study will look at the value of aggregating multiple distributed PV plus storage systems to provide grid-level services.

This research is supported by the Energy Department's Solar Energy Technologies Office.