Bill saving analysis of rooftop PV customers and policy implications for Thailand

doi:10.1016/j.renene.2018.07.057

Renewable Energy

Volume 131, February 2019, Pages 422-434

https://doi.org/10.1016/j.renene.2018.07.057 Get rights and content

Highlights

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Bill savings of rooftop PV in Thailand is analyzed under potential support schemes.
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Bill savings vary across individual load profiles and factors for each group.
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Load shapes do not significantly impact the values of bill savings.
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Net metering causes a smaller variation of bill savings compared to net billing.
•
Net billing can help limit PV size and mitigate utility's concerns.

Abstract

Since a new policy supporting rooftop photovoltaics (PV) will be launched in Thailand, this study investigates the economics of utility customers' investments in rooftop PV (values of bill savings) for four customer groups (residential scale, small general service, medium general service and large general service) across electricity tariffs, PV-to-load ratios and compensation schemes (net metering and net billing). The values of the bill savings of all groups are higher under the conditions of higher buyback rates/credit, lower PV-to-load ratios, and higher retail rates. Under the current retail rate design, the values of the bill savings of residential and small general service groups are slightly higher than those of medium and large general service groups, since there are demand charges for the latter two groups that cannot be completely avoided using rooftop PV. Load shapes do not significantly impact the values of the bill savings for all customer groups. Additionally, net metering causes a smaller variation in bill savings as compared to net billing, implying more flexibility for the customers to size their PV systems over a broader range. In contrast, net billing would encourage customers to limit their PV sizes, thereby mitigating the concerns of the utilities.

Introduction

Among the emerging economies,¹ Thailand is the leading market for renewable power and investments in solar power [1]. The building blocks, especially the long-term Alternative Energy Development Plan 2015–2036 (AEDP 2015) and various incentive programs, for solar PV development in Thailand are already in place. Thailand's AEDP includes targets to achieve a 30% share of the renewable energy in the final energy consumption of the year 2036. In Q3 of 2017, the cumulative installed capacity of solar PV plants connected to the grid was approximately 3211 MW, which is an increase of more than 200% from 2013, as shown in Fig. 1. Of the total installed capacity, 95% is solar farms (ground-mounted solar systems) while the rooftop PV capacity share is approximately 5%² [2].

Focusing on rooftop PV, incentive schemes are one of the key building blocks that can help increase the deployment of this technology. Since 2013, the Thai government has begun to promote rooftop PV through a fixed Feed-in Tariff (FiT) scheme and in 2015, revised the incentive scheme by which all electricity generated from rooftop PV is purchased at fixed rates (6.01–6.85 THB/kWh or 0.18–0.21 USD/kWh,³ depending on installed capacity). With a policy environment that is friendlier to rooftop solar power, many rooftop PV business models, such as roof rentals, power purchase agreements (PPA) and leasing services, have emerged in the country [3].

In 2016, a new rooftop PV scheme was announced, representing a shift from the feed-in tariff scheme toward a self-consumption scheme. While the feed-in tariff scheme compensates for all units generated by rooftop PV, a self-consumption scheme encourages the use of PV electricity by the consumers first while the excess generation injected into the grid may be compensated, depending on each country's policy [4]. The policy was launched as a pilot project to encourage the on-site consumption of the electricity generated from rooftop PV systems while any excess electricity fed back to the grid would not be compensated. The Thai government would use the results of the evaluation of this pilot project to launch a new support scheme for rooftop PV with the intention of compensating for the excess electricity injected into the grid. However, the details of the compensation schemes are not yet confirmed at the time of writing.

To support the self-consumption of PV electricity, there are two main compensation schemes for excess PV generation: net metering and net billing. With net metering, the compensation is calculated on an energy-credit basis with one bi-directional meter. For net billing, the compensation is calculated as a monetary credit, using two different meters or one digital meter to measure the imported and exported electricity separately [5,6]. Normally, self-consumed PV electricity is valued at the retail rate to which the utility customers subscribe. There are also options for crediting self-consumed PV at a premium rate [7]. In the case of excess electricity sent back to the grid, the excess will be compensated differently depending on the features, such as the number of meters, compensation type, banking options, banking periods, buyback options and buyback rates, of the compensation scheme in each country.

For each type of compensation scheme, the value of the consumers' bill savings depends on the customers' characteristics, the designs of the PV systems, retail rate structures and the applied compensation scheme. Each type of compensation scheme may have different levels of benefits for different groups of customers. This study raises the following question: “For a particular self-consumption scheme, how do the bill savings vary across individual load profiles and electricity tariffs and how can the findings help inform policy development?”

This study analyzed the bill savings of rooftop PV under different compensation schemes (net metering and net billing), focusing on 4 customer classes sampled from 224 individual load profiles of the customers of the Metropolitan Electricity Authority (MEA), which is the distribution utility that supplies electricity to 3,632,722 customers as of 2016 in Bangkok and two neighboring provinces (Nonthaburi and Samut Prakarn). We also conducted sensitivity analyses by varying the PV sizes using the various PV-to-load ratios of each customer group to provide detailed analyses that would help inform upcoming rooftop PV policy development in the country.

This paper is structured as follows. Section 2 summarizes the existing literature related to the topic. Section 3 describes the data used in the research, assumptions and detailed methodology of this research. Section 4 discusses the bill saving results of each customer group/retail tariff under different compensation schemes and PV-to-load ratios. Finally, Section 5 summarizes the key findings and policy implications.

Section snippets

Literature review

Bill savings have been a topic of interest, particularly from the standpoint of policymakers who seek to understand the costs and benefits of solar policies. For example, in Refs. [[8], [9], [10]], bill savings were mentioned as one of the financial incentives for encouraging consumers to generate electricity on-site. In the case of the UK, as shown in Ref. [8], the annual profits of rooftop PV installation is a factor of the FiT rate for all PV generation, the export rate for the electricity

Data

This analysis relies on two main factors, which are hourly individual load data and hourly simulated PV production, as inputs into a System Advisor Model (SAM), which is a performance and financial model developed by the United States' National Renewable Energy Laboratory (NREL) for renewable energy projects. Individual load data from January to December 2015 were collected by the Metropolitan Electricity Authority's (MEA) annual load study.

The selected individual load research data include

Results

The bill saving analysis is classified by customer group. The distributions of bill savings across supporting schemes and PV-to-load ratios for

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Res 1.2 are shown in Fig. 3, Fig. 4;
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Res 1.3 are shown in Fig. 5;
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SGS 2.1 are shown in Fig. 6, Fig. 7;
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SGS 2.2 are shown in Fig. 8, Fig. 9;
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MGS 3.2 are shown in Fig. 10;
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LGS 4.2 are shown in Fig. 11.

Res 1.2, SGS 2.1 and SGS 2.2 have two sub-groups: “with low daytime load” and “with daytime load” due to the variations in the load samples. Res 1.3 has only one

Conclusions

As Thailand plans to adopt a new support policy for rooftop PV, it is important to address customer economics (i.e. values of bill savings) of the investments before implementing such a policy. Our analysis is based on individual load profiles of different customer groups (residential scale, small general service, medium general service and large general service) and simulated PV production profiles from SAM to address the values of the bill savings across various scenarios, including

Acknowledgments

The authors would like to express their gratitude to the Joint Graduate School of Energy and Environment, King Mongkut's University of Technology Thonburi, and the Center of Excellence on Energy Technology and Environment, PERDO, Bangkok, Thailand, as well as the Petchra Pra Jom Klao Doctoral Degree Research Scholarship from King Mongkut's University of Technology Thonburi for financial supports.

The authors would also like to thank the Energy Conservation Promotion Fund (ENCON Fund) for

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Citation Excerpt :
Hence, the design of the discount rates should be carefully investigated to achieve an accurate feasibility study. For relevant studies, many papers presented a techno-economic analysis of the BTMS for rooftop PVs [11–14]. Some studies assessed an analysis of the combination of the rooftop PVs and battery energy storage systems (BESS) under the BTMS [15–17].
With a great reduction in the cost of rooftop photovoltaic systems (PVs), many new business models of PVs and the behind-the-meter scheme (BTMS) have been launched, especially the solar power purchase agreement (SPPA). The SPPA is a model that the potential investors supply and sell the PV output power to customers with the discount rates, directly. If the excess energy supplied to the grid is allowable, the investors will get additional revenue from the reverse power. The proposed rates from the investors are practically formulated in term of the SPPA discount rates on utility’s retail rate. Therefore, to convince the customers while retaining revenue of the investors, attractive and feasible SPPA discount rates should be investigated thoroughly. The proposed methodology in this paper to determine the SPPA discount rates for rooftop PVs under the SPPA and BTMS is presented. The cost optimization was developed and proposed to minimize the SPPA electricity charges while maintaining an acceptable internal rate of return (IRR). The benefit of the customers is the lower electricity charges, while the benefit of the investors is the sold power from rooftop PVs. Furthermore, with the proposed methodology, the large general service load in Thailand to assess the effect of the rate of excess energy and size of rooftop PVs. From the result, it showed that an oversized rooftop PVs will restrict the SPPA discount rates. The customers will get the higher SPPA discount rate if the rate of excess energy increases.

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Bill saving analysis of rooftop PV customers and policy implications for Thailand

Highlights

Abstract

Introduction

Section snippets

Literature review

Data

Results

Conclusions

Acknowledgments

Energy Pol.

Renew. Energy

Renew. Energy

Renew. Energy

Energy Pol.

Energy Pol.

Appl. Energy

Energy Sustain Dev.

Sust Energ Technol and Asses

Energy

Renew. Sustain. Energy Rev.

Energy Pol.

Power Shifts Emerging Clean Energy Markets

Thailand Solar PV Policy UPdate 01/2017