Savings in Action: Lessons from Observed and Modeled Residential Solar Plus Storage Systems

Abstract

The electric grid is rapidly evolving as small-scale, demand-side resources play increasingly important roles in grid operations and decarbonization. Maximizing the potential of demand-side resources involves incentivizing electricity customers to use those resources in ways that benefit the broader electric grid. These incentives depend largely on the electricity cost savings that customers can realize by adopting demand-side resources. Determining these potential cost savings is a complex task. Cost savings depend on numerous factors, including the characteristics of different technologies, the algorithms that control these devices, system performance, customer behavior, electricity rate structures, and climatic factors. Another challenge is that estimated cost savings are frequently based on modeled rather than observed system performance, particularly in the literature.In this study, we begin to fill the gap in empirical research of demand-side resources using data from a new-construction residential community equipped with rooftop solar and storage (S+S) in Arizona. We use these data to analyze the factors that determine customer electricity cost savings and emissions impacts of S+S in the real world. We then compare these data to modeled system performance to understand how models deviate from real-world outcomes. Based on these findings, we explore ways to improve such models and, conversely, use modeled results to suggest improvements to actual S+S deployment. The results of these analyses can be summarized in four key findings. Rate structures play a central role in the grid and customer value of demand-side resources.In the Arizona case study, the local utility enrolled all households in the community in an experimental rate designed for customers with demand-side resources. The data show that the distributed generation rate benefited the grid by reshaping customer grid demand profiles, especially by reducing demand during grid peak periods. At the same time, the challenge associated with reducing demand charges in the pilot rate plan eroded the customer cost savings from S+S adoption. The resulting erosion of customer value caused at least some community members to switch back to a time-of-use rate plan that was less beneficial to grid operations. In this case study and in other circumstances, there is a tension between designing rates that benefit the electric grid and providing incentives that induce customers to adopt demand-side resources.Certain customers can benefit more from demand-side resource adoption than others. Electricity cost savings varied significantly across households in our case study, even though the newly constructed, energy efficient homes were all equipped with similar S+S systems. Household-level factors that drive cost savings include total electricity demand, demand profiles (e.g., more use during on-peak hours), and differences in home square footage. Modeled battery dispatch and sizing reveals opportunities for additional cost savings.Modeled results show that current batte...

Assessing the New Home Market Opportunity: Case Study and Cost Modeling for Solar and Storage in 2030

“…Before addressing those two questions, it is important to provide context on the project. Mandalay Homes is headquartered in the Southwest and specializes in the construction of highperformance and energy-efficient homes (O'Shaughnessy et al, 2022a). In 2017, Mandalay Homes partnered with sonnen to introduce a new, 2,900-home community near Prescott, Arizona, that would include solar and battery storage systems as a standard offering (Sonnen, 2017).…”

“…The proliferation of these types of programs could generate more value opportunities for solar and storage systems, thereby reducing the return-on-investment timeline and potentially encouraging more solar-plus-storage adoption. The Mandalay Homes community could operate as a virtual power plant, but currently the homes operate individually to maximize savings to each homeowner (O'Shaughnessy et al 2022a). This is in part because a rate structure has not been designed that would incentivize the operation of the homes as a fleet.…”

“…This is in part because a rate structure has not been designed that would incentivize the operation of the homes as a fleet. If such a program and related rates existed, it is possible that this community could not only provide benefits to the grid, but also provide more resilience to the grid (O'Shaughnessy et al 2022a).…”

“…For a deeper analysis relating to the performance of these solar and storage systems, seeO'Shaughnessy et al (2022a).…”