Report

Impact of increased solar penetration on bill savings of

Submitted by: Waqas Ahmad

Submitted to: Dr. Arif Khattak

USPCAS-E, University of Engineering and Technology, Peshawar.

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Contents

1 Introduction 4

2 Motivation 5

3 Literature Review 6

4 Methodologies 8

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List of Figures

1 PV system single line diagram for net-metering . . . . . . . . . . 5

2 VOS in Flat Plat . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3 VOS in IBR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4 bill savings under base and IBR for costumers . . . . . . . . . . . 8

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1 Introduction

The country’s economic and industrial development depends primarily on the

sustainable and reliable electric power supply. The transition to renewable

and sustainable energy technologies has become unavoidable with the deple-

tion of fossil-fuels and serious environmental concerns[1]. Net metering policy

has proved to be an important impetus for supporting the worldwide local gen-

eration schemes. It has been introduced successfully in many countries such as

Italy, Belgium, Cyprus, Denmark, the Netherlands, Greece, Canada, the USA

and Japan[2, 3].

Net metering is a regulatory framework that allows grid-tied Distributed

Generation (DG) owners to partially or completely cover their energy needs

and get paid for any additional energy injection in the grid at net metering

tariffs set by regulatory bodies. Sometimes called a’ prosumer’ is a customer

with a generation facility. For net metering, an electric meter is used, which

spins in both directions and tracks the net energy usage as well as the prosumers

’ net excess injection into the grid. When reporting net usage and net excess

injection separately, an alternative metering system can also be used with two

basic metres. The prosumer is paid for the total electricity usage at the end

of the billing cycle. If the net excess injection exceeds the net consumption,

the pecuniary benefits are provided to the user at the levels pre-decided by the

utility[3–5 ].

Electric power shortages can have serious repercussions on a country’s de-

velopment index. For the past decade, Pakistan has been on the list of energy-

deficit countries and various attempts have been put together to bridge the gap

in energy demand supply. In Pakistan, net metering is implemented to tap

the renewable energy potential and, in particular, local PV generation systems.

This strategy is supposed to be one of the potential options to leverage the

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God-gifted solar energy for residential customers, to benefit from the power of

God-given solar energy. Since its implementation in September 2015[6 ], net me-

tering growth in Pakistan is not up to standards due to some severe proliferation

challenges.

Figure 1: PV system single line diagram for net-metering

2 Motivation

The concept of net metering is to allow customer electrical meters with gener-

ating facilities to turn back when their generators generate more energy than

the demand of customers. Net metering enables customers to use their gen-

eration to offset their consumption throughout the accounting period, not just

instantly. As the energy condition in Pakistan is not a satisfied one, and also our

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power plants are mostly dependent on exported fuel which results an increase

in circular debt of the country, on the other side not meeting the shortfall in

energy sector. Pakistan has some of the world’s highest insulation’s values, with

8 to 9 hours of sunshine a day, which is ideal climatic conditions for solar power

generation. By using rooftop residential area of for solar PV and then integrate

the power generating unit with the national grid would turn out to be a useful

solution to counter with the current energy crises we are going through, on the

other hand it will facilitate the residential customer from high tariff imposed

because of the fuel purchased by PSO on high price.

3 Literature Review

In 2017-2018, Thakur Jagrutia, Chakraborty Basaba work on the implementa-

tion of smart meters under smart grid pilot projects in India to open up avenues

for alternative retail rates and net metering policies. They work on the impact

of various retail rate mechanisms on net-metered consumer’s bill savings, with

increasing solar penetration scenario. Their work studies the impact of vari-

ous retail rate mechanisms on net-metered consumers ’ bill savings, with an

increasing scenario for solar penetration. Seven different scenarios are designed,

which are based on increasing solar penetration in the energy mix. Retail rates

(two-time invariant and three-time variant) are designed using simulated elec-

tricity prices, after simulating wholesale electricity prices through a unit-based

energy system model. To assess the impact of increasing penetration of PV on

the consumer economy, for all scenarios, the electricity bills of 97 net metered

consumers are calculated using specified retail rates. From the results it is ob-

served that the value of bill savings for all retail rates decreases with increasing

PV penetration. In addition, the decrease in the value of bill savings is more

in the rates of time-variants compared to the time-invariant rates. The value of

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bill savings achieved under five different rate designs, with scenarios of increas-

ing solar penetration is discussed in this section.

Figure 2: VOS in Flat Plat

The flat rate decreases with increase in solar the penetration, thus the sav-

ings achieved through net-metering consumer also decreases. In flat rate, the

bill saving benefit is the same for all customers and the saving amount is equiv-

alent to the flat rate.The VOS bill savings, on an average, decrease from Rs.

4.51/KWh in the base case to Rs. 4.26/KWh

These result shows, how grid-integrated solar penetration can impact the

benefits of generating distributed PV. The savings made from the system will

have a direct effect on future developments in PV deployment. The flat rate

and IBR give customers more savings. The relative attractiveness of time-based

rates is dependent on the available consumer profile, PV characteristics, and

alternative rate choices.

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 Figure 3: VOS in IBR

Figure 4: bill savings under base and IBR for costumers

4 Methodologies

For the fiscal analysis of the net metering regulations in Pakistan, following case

studies will be taken into account:

1. Net metering in the absence of local PV generation (base case scenario)

2. Net metering in the presence of local PV generation:

(a) Net metering applied on the common area services only and apart-

ments are billed individually.

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 (b) Net metering applied on the common area services only and the

apartments are billed on the basis of aggregate building demand.

(c) Net metering implemented on the aggregate energy demand of the

entire building.

Case 1 is the base case. In Case 1 and Case 2a, General Residential Supply

Tariffs will be used to compute the surplus energy credits and the energy cost of

the individual residential units and the common area services. Off-peak General

Residential Supply Tariffs will be used to calculate the excess energy credits. In

Cases 2b and 2c, Single-Point Bulk Supply Tariffs will be used to compute the

surplus energy credits and the energy cost of the aggregate energy demand of the

residential building and off-peak Bulk Supply Tariffs will be used to recompense

the excess energy injection in the grid.

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 References

[1] M. Tükenmez and E. Demireli, “Renewable energy policy in Turkey with the

new legal regulations,” Renewable Energy, vol. 39, pp. 1–9, September 2011.

[2] I. A. Sajjad, M. Manganelli, L. Martirano, R. Napoli, G. Chicco and G. Parise,

“Net Metering benefits for Residential Customers,” IEEE Industry Applications

Magazine, vol. PP, No. PP, 2017.

[3] A. Poullikkas G. Kourtis, I. Hadjipaschalis, “A review of net metering mecha-

nism for electricity renewable energy sources,” International Journal of Energy

and Environment, vol. 4, pp. 975–1002, 2013.

[4]. N. R. Darghouth, G. Barbose, and R. Wiser, “The impact of rate design and

net metering on the bill savings from distributed PV for residential customers

in California,”Energy Policy, vol. 39, no. 9, pp. 5243–5253, 2011.

[5]. J. E. Burns, J. Kang, “Comparative economic analysis of supporting policies

for residential solar PV in the United States: Solar Renewable Energy Credit

(SREC) potential,”Energy Policy, vol. 44, pp. 217–252, 2012.

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