As part of the U.S. Department of Energy’s SunShot Solar Outreach Partnership (SolarOPs), the N.C. Clean Energy Technology Center (formerly the N.C. Solar Center) announced the release of  “Solar PV Deployment through Renewable Energy Tariffs: An Option for Key Account Customers.”
 
Many large companies, like Google, have taken an interest in corporate sustainability and are requesting that utilities provide an option for them to opt for renewable energy instead of the utility’s standard power mix. This report examines renewable energy tariffs, a special rate option that is quickly attracting attention as a way to do this.
 
Renewable energy tariffs, which are seen in 10 states and under consideration in others, allow utilities’ highest energy users to pay a premium in order to obtain power generated from renewable sources. While the cost of renewable energy, and particularly solar PV, is rapidly declining, in many places it is still higher than utilities’ cost for purchasing wholesale energy. By having customers pay a premium for the renewable energy they request under the tariff, utilities can ensure that there is no impact on non-participating customers’ rates.
 
“Renewable energy tariffs offer a convenient way for large customers to obtain renewable power and can directly encourage additional renewable generation,” said Autumn Proudlove, policy analyst and lead author of the report. “Oftentimes these customers are located in sites not suitable for self-generation or in areas that do not permit third-party power purchase agreements, so these tariff programs provide an opportunity to expand access to renewable energy.”

The report highlights two utilities that have recently begun offering such tariffs, Duke Energy Carolinas and Dominion Virginia Power, and offers key considerations for renewable energy tariff design in order to maximize benefits to solar technology, customers, utilities and the public. These considerations include:
 
·         Location and Siting of Generation: Locally-sited generation is sometimes a draw for large customers to participate in renewable energy tariffs. Siting of generation is also important to utilities in order to maximize grid benefits. This is particularly relevant for solar PV, as it tends to be located at the distribution or sub-transmission level.
 
·         Pricing Approaches: Eliminating Rate Impacts, Benefitting from Solar PV Cost Declines: Renewable energy tariffs are generally designed to minimize or eliminate any rate impact on non-participating customers by charging a premium for renewable energy. However, it is possible to design a program where future premiums are reduced or eliminated as a result of PV cost declines. Reducing premiums in this way would still ensure no rate impact on non-participating customers.
 
·         Flexibility, Customer Input, and Education: Allowing for contract flexibility and customer input adds to the appeal of renewable energy tariffs. Furthermore, educating customers about the different types of renewable energy and allowing customers to choose what type of renewable resource they would like to get their power from may encourage more participants to request that their power comes from solar.

Keeping these considerations in mind, renewable energy tariffs have the potential to drive utility-scale solar PV development while providing a host of benefits to customers and utilities alike. “For utilities and their large customers interested in finding innovative ways to access renewable energy, this report provides a recipe for designing a successful program,” said Steve Kalland, executive director of the N.C. Clean Energy Technology Center.


To obtain a full copy of the report, please click here.
 
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