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Innovative Solar Business Models Project: Analysis and Products


Analytical Framework of Distributed PV Costs and Benefits

As part of preliminary analysis, RMI completed an analytical framework to enable an assessment of the costs and benefits of distributed solar generation on the electric supply system at current and future projected penetrations.

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A Review of Solar PV Benefits and Costs Studies (2nd Edition)

From this foundation, RMI conducted a comprehensive study reviewing 16 distributed solar PV benefit/cost studies to assess what is known and unknown about the categorization, methodological best practices, and gaps around the benefits and costs of distributed solar PV, and to begin to establish a clear foundation from which additional work on benefit/cost assessments and pricing structure design can be built.

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Analytical Tools

EDGE Model

While a growing body of demonstration projects and analyses is providing empirical data that demonstrate the technical viability of optimally integrating distributed PV to support the grid, there is comparatively little analysis to translate that into costs and values. To better assess the potential value and cost implications, RMI is developing the Electricity Distribution Grid Evaluation (EDGE) model, a MATLAB-based simulation tool.

The primary goal of the EDGE model is to provide clearer insights into the distributed PV value proposition (and eventually complementary technologies such as distributed storage, smart inverters, etc.) to inform more-effective decision making by utilities, customers, regulators and developers, who can incorporate these insights into robust business models. Although the EDGE model includes the ability to study distribution system impacts, it is not intended to replace utilities' existing distribution management systems. Rather, it is intended to provide insight into the likely implications of the integration of distributed energy resources. These may then be studied in further depth using more detailed network models.

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Model Technical Review Workshop Summary

In May 2013, the ISBM project team held a technical review session with electricity industry experts in system operations, planning, and economics from Sandia National Lab, National Renewable Energy Lab (NREL), Electric Power Research Institute (EPRI), Lawrence Berkeley National Lab (LBL) and Solar Electric Power Association (SEPA). Attendees were asked to critique current approach and methodologies in order to prioritize next steps for model development to ensure the most value for industry and practical application within the ISBM project.

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Application:Utility Partnerships

Within the project, RMI has developed partnerships with two utilities–a vertically investor-owned utility in the Southwest and a generation and transmission cooperative with over 20 member distribution cooperatives in the Midwest–to practically test project hypotheses and new concepts within contrasting utility business models and regulatory environments.

While the circumstances are unique within each territory, both partnerships aim to enable win-win-win solar business models for multiple stakeholders by developing models that could:

  • Optimize and capture increased net value either through identified opportunities to reduce solar’s installed or operational costs or increase solar’s production value.
  • Provide new pricing options that either increase customer adoption, provide more accurate price signals and/ or minimize cross-subsidization;
  • Consider solar PV as a part of a holistic portfolio or package of technologies or strategies;
  • Tap new customer markets and increase customer adoption, thereby expanding the economic solar market broadly.

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