Assessing How Utility Rate Design Affects the Income Distributional Impacts for Residential Customers With and Without Solar PV

Although the size of the PV system could have been adjusted to reflect average residential PV system sizes in each utility area, holding the system size constant across the different utilities allows for isolation of the effects due to changes in rate structure. [...] The tilt of the modeled PV systems was set equal to the latitude of the geographic area for which the model was run, in line with best practices by PV installers. [...] However, energy charges were reduced by $0.04/kWh with the addition of a demand charge (both for the standalone demand charge and the combination of the TOU rate and demand charge) due to NREL’s finding that the average decrease in energy rates associated with the implementation of a demand charge ranged from $0.04-$0.05/kWh. [...] Although the dollar impacts on bills from higher fixed charges were the same for all customers, the scale of the percentage change in annual bills is dependent on the load profiles for each state, with the largest percentage changes occurring in the states with the lowest load profiles and, thus, the lowest initial electric bills. [...] For example, when running the simulation for a demand charge, the user can run multiple iterations of the simulation to test for differences in the customer’s level of responsiveness to the price signal presented by this new rate structure.