The prosumers and the grid

Abstract

Prosumers are households that are both producers and consumers of electricity. A prosumer has a grid-connected decentralized production unit and makes two types of exchanges with the grid: energy imports when the local production is insufficient to match the local consumption and energy exports when local production exceeds it. There exists two systems to measure the exchanges: a net metering system that uses a single meter to measure the balance between exports and imports and a net purchasing system that uses two meters to measure separately power exports and imports. Both systems are currently used for residential consumption. We build a model to compare the two metering systems. Under net metering, the price of exports paid to prosumers is implicitly set at the price of the electricity that they import. WeThe authors thank the FNRS and the Walloon Region (Grant TECR) for its financial support. They also thank P. Agrell and participants at the Mannheim Energy Conference, the BAAE conference held at CORE/Louvain-la-Neuve, the 65th congress of AFSE Nancy, the Energy Symposium at University of Barcelona, the third FAERE Conference in Bordeaux, the EARIE conference in Lisbon, the IIOC conference in Boston and the workshop on electricity demand at Université Paris-Dauphine for comments and I. Peere for English editing.

PV adoption: the role of distribution tariffs under net metering

“…We find that an increase in one eurocent per kWh in the tariff leads to an increase in the number of installation by around 8%. This empirical result relates to the finding of the theoretical literature according to which a net metering system coupled with a tariff structure which is mostly volumetric leads to an inefficiently high deployment of decentralized production units (Brown and Sappington (2017a), Brown and Sappington (2017b) and Gautier et al (2018)). However, we find that higher tariffs do not lead to investments in PV panels of a larger capacity.…”

“…For the other housing factor considered, it is a priori unclear how it could affect investments in PV installations. 16 We control for socioeconomic factors. % unemployed is the percentage of unemployed inhabitants.…”

“…We still analyze our data as if it was balanced. 16 Unfortunately we do not have data about the share of households that rent instead have own the place where they live on a yearly base. However, we believe that this factor is rather stable over the years of our sample.…”

“…Several EU countries (like Denmark, Poland, Austria, Cyprus, Greece, Hungary, Latvia, Netherlands and Belgium) and 43 US States use a net metering system. From Brown and Sappington (2017a), Brown and Sappington (2017b), Gautier et al (2018) and Schittekatte et al (2018), we know that net metering and net purchasing provide different incentives to invest in DPU and share the burden of network costs differently. Net metering has been criticized for providing inadequate incentives for investment in DPU, leading to overinvestment compared to the social optimum.…”

Resilient Prosumer Scenario in a Changing Regulatory Environment—The UniRCon Solution

“…Integration of a consumer into various grid concepts, such as the management of the electricity costs as proposed in [15], may require appropriate communication and automatic control [16] or metering systems [17]. Incentives can, thus, be proposed to encourage prosumers to balance local production and consumption by adapting their needs to actual energy generation as, for example, by connecting or disconnecting some of their loads (flexible loads).…”