Full Title: Smart Rate Design for Distributed Energy Resources
Author(s): Mark LeBel, Jessica Shipley, Carl Linvill, Camille Kadoch
Publisher(s): Regulatory Assistance Project (RAP)
Publication Date: November 1, 2021
Full Text: Download Resource
Description (excerpt):
Net metering with monthly netting — a simple billing mechanism for distributed energy resources (DERs), often primarily solar PV — has existed since the early 1980s. In recent years, there has been a wide-ranging national debate about the best methods to reform rates for distributed energy resources, driven by the inefficiencies of traditional rate designs, concerns around cost shifts, and the potential to use customer-sited resources to lower system costs.
This paper was produced for the Michigan Public Service Commission as part of a Distributed Energy Resources Rate Design working group process under the state’s MI Power Grid initiative. Michigan already transitioned from monthly netting to the “inflow/outflow” model over the past few years. This paper examines the trade-offs involved in updating approaches to DER rate design. It then suggests three possible pathways for further reform to help residential DERs fulfill their promise as a key part of the grid of the future in Michigan.