Solar PV, battery storage, and other distributed energy resources (DERs) are becoming cheaper by the day. However, solar-plus-battery economics are not just about what you pay for the system. They’re also about what’d you’d otherwise continue paying to your utility, as well as what you do and don’t pay for on your monthly bill. That’s where pricing structures come into play, and they matter—not just for the timing of cost-effective solar-plus-battery economics but also how investment in solar-plus-battery systems might evolve and what the future electricity grid could look like.
In our recently released report, The Economics of Load Defection, we modeled the dominant electricity rate structures for most customers in the U.S.—a volumetric rate for residential and a three-part rate that included a demand charge for commercial. In both cases we assumed no export compensation, though we considered net metering as a special case in the analysis. The result suggested that solar and battery systems would be an economic supplement to grid-supplied electricity within the next decade for millions of customers, and would ultimately be economic as the primary source of electricity, with the grid as a backup resource. Indeed, these economics might be realized even sooner than we forecast, given recent announcements of battery prices that are five years ahead of our projections. This has profound implications for customers, service providers, utilities, and regulators.
cleantechnica