Achieving Optimal Value of Solar: A Municipal Utility Rate Analysis

Abstract

Wind and solar renewable energy in the United States is projected to triple by 2050 to nearly 30% of total electric energy generation. The upper Midwest region (Iowa, Minnesota, and North and South Dakota in particular) is considered wind energy country and not historically known for solar energy development. In this work, Value of Solar (VOS) is developed as a photovoltaic (PV) optimization measure and analysis tool using a northwest Iowa municipality as a representative case study. By applying a top-down load duration curve system analysis, VOS is used to optimize PV orientation and compare electric rate structures for increasing levels of total PV energy contribution. VOS of a fixed south-southwest orientation exceeds the levelized annual costs of installation with a larger net benefit than a one-axis-tracking solar system. Production-data modeled VOS is up to 12% higher than Typical Meteorological Year (TMY) predictions, indicating significant correlation between PV generation and peak municipal demand. Compared to alternative time-of-use rates, a demand/energy rate structure better matches VOS economic value and optimal orientation. This VOS methodology is an easy-to-use yet meaningful tool for municipalities and smaller utilities to evaluate strategic installation of and investment in PV for their local community.