Grid-scale solar presents most cost-effective way to obtain value of solar

April 19, 2016

The Arizona Corporation Commission opened hearings Monday to investigate the value and cost of solar energy, which may lead to developing policies governing its adoption in Arizona. The hearings are scheduled through May 6.

Brad Albert is general manager for resource management at APS and one of APS’s expert witnesses in the hearing. In his testimony Tuesday, Albert said calculating a value of solar can inform resource planning decisions, including which technologies are most cost-effective for customers in generating solar energy.

Albert also responded to the testimony of Tom Beach, who testified on behalf of solar lobbying group The Alliance for Solar Choice, Albert questioned Beach’s proposed value of solar methodology. The methodology compared rooftop solar with natural-gas generation as the alternative resource, but omitted grid-scale solar:

  • “…Mr. Beach fails to consider that grid-scale solar can provide virtually all of the claimed rooftop solar value attributes at a fraction of the cost. The failure to consider alternative means to obtain the same value violates one of the most basic principles of electric utility resource planning:  identifying the least cost manner of meeting an identified resource need.” (April 7 rebuttal testimony, p. 2)
  • This failure to consider grid-scale solar as a resource alternative gives rise to two primary questions: “How can the value of the exported rooftop solar energy possibly be 22.4 to 26.3 cents/kWh when the same value can be obtained for 4.6 cents/kWh or less?” and “Why should APS customers pay any more for this energy than what the best alternative would be for producing this energy?” (April 7 rebuttal testimony, p. 6-7)
Albert also shared data from nearly 29,000 APS residential customers who had rooftop solar systems for all of 2015. The data show a misalignment between when rooftop solar systems export energy to the grid, and when that energy is most needed. Among the findings:
  • “It is clear that a grid-scale solar system provides a higher value product than exported rooftop solar energy in terms of both energy value and generation capacity value.” (April 7 rebuttal testimony, p. 20)
  • “One of the most interesting aspects of this data is that it indicates these rooftop solar customers actually export more energy over the course of the entire year that they use to offset their own consumption.” (April 7 rebuttal testimony, p. 14)
  • "I conclude that there is a significant mismatch between when rooftop solar customers export to the grid and when the energy is most valuable. Due to the low demand during shoulder periods, the relatively high supply of exported rooftop solar energy is simply not very valuable.” (April 7 rebuttal testimony, p. 18)
The graphs below, based on customer and grid data, illustrate Albert's statement about the mismatch on the day of peak energy use in 2015 and a typical spring day:

  • “Using actual meter data on the peak load day of 2015 (August 15-Figure 4), APS observed that at the time of peak customer consumption (5 p.m.), only 5% of rooftop solar energy was being exported (as a percent of nameplate rating).”

  • “Figure 5 shows that on a typical day in April 2015, our rooftop solar customers’ self-consumption pattern was fairly steady from about 9 a.m. to 5 p.m., and their exports were the highest at midday while system loads were dipping.” (April 7 rebuttal testimony, p. 17)

Peak Day 2015: When Arizona heat is on, how much electricity is solar power producing?

Note: Figure numbers correspond with those in Albert's April 7 rebuttal testimony filed with the ACC.