A Regulator’s Guidebook: Calculating the Benefits and Costs of Distributed Solar Generation

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Source:
Interstate Renewable Energy Council, Inc.
Rábago Energy LLC.
Authors:
Jason B. Keyes
Karl R. Rábago
Date:
1 March 2014

This paper offers lessons learned from the 16 regional and utility-specific, distributed solar generation studies summarized in A Review of Solar PV Benefit and Cost Studies, a July 2013 report by the Rocky Mountain Institute. The paper then proposes a standardized valuation methodology for public utility commissions to consider implementing in future studies. The main conclusions of the paper are that (1) distributed solar generation primarily offsets combined-cycle natural gas facilities, which should be reflected in avoided energy costs; (2) distributed solar generation installations are predictable and should be included in utility forecasts of capacity needs, so that distributed solar generation should be credited with a capacity value upon interconnection; and (3) the societal benefits of distributed solar generation policies—such as job growth, health benefits and environmental benefits—should be included in valuations, as these were typically among the reasons for policy enactment in the first place.

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