6: Net-Value Assessment & Pricing
This section provides detail on CSVP’s streamlined analytic process, which speeds the path from early-stage program design to competitive program pricing. It begins with an overview presentation and a paper on CSVP’s GAP economic analysis. This approach is characterized by a) framing with a program narrative that is brief and meaningful to utility decision-makers, and b) focusing on a limited number of benefits, in order to meet a solar cost target. That, in turn can support competitive program pricing. Three generic scenarios illustrate how this GAP analysis applies in different utility settings. A presentation and blog on pricing strategy clarifies the last step in this approach. It applies accepted pricing tools to create the final, competitive program offer. In addition, an expanded table of CSVP Pricing Case-Study Summaries tells how 12 community-solar programs have presented their pricing strategies. CSVP’s documentation of the SMUD plan from its work with the Sacramento Municipal Utility District is also included.
A new addition (2024) to this collection of resources is a presentation provided by Cliburn and Associates, under a National Community Solar Partnership Technical Assistance project with Colorado-based Tri-State G&T. The downloadable presentation is provided below; a version of the model discussed is available upon request and will be posted in Q1 2024. |
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Utility-led community solar programs often struggle with the economics of community-scale solar and the need for pricing that is both cost-based and competitive. While policymakers work to address fundamental changes to utility rate-design policies, program designers still need an internal process to help advance solar projects and programs today. The CSVP GAP Analytic process is a response to that need. Note that this process was designed primarily to support community solar program design, but it is also a tool for utility decision-making around other distributed PV procurements.
GAP process objectives include
The documents below include a presentation-based report that gives on Overview of the GAP process (September, 2017), and a paper from the Proceedings of the American Solar Energy Society, National Solar Conference (July, 2016). The latter is a preliminary document, focused on the Northern California Generic Model (see below). Yet it also provides a useful narrative on the genesis of the GAP approach, and it lays the framework for a assessing a customer-retention benefit that is appropriate for some (customer-owned) utilities that face rapid customer-side solar growth.
GAP process objectives include
- Basing the analysis on a program narrative, which concisely describes all the benefits of the procurement and the community solar program;
- Utilizing the analytic processes as a tool for decision-making, and not as an end in itself;
- Encouraging the introduction of customized solar design elements that add strategic net value;
- Including a rigorous solar- benefits analysis, narrowly focused on achieving the GAP pricing goal;
- Adapting familiar rate-design strategies for pricing the offer.
The documents below include a presentation-based report that gives on Overview of the GAP process (September, 2017), and a paper from the Proceedings of the American Solar Energy Society, National Solar Conference (July, 2016). The latter is a preliminary document, focused on the Northern California Generic Model (see below). Yet it also provides a useful narrative on the genesis of the GAP approach, and it lays the framework for a assessing a customer-retention benefit that is appropriate for some (customer-owned) utilities that face rapid customer-side solar growth.
| 2017_09_15_gap_overview_final_2.pdf |
| 2016_08_ases_cliburnbourgpowers.pdf |
The GAP analytic process evolved through a series of modeling exercises. Each was supplemented by reviews from the CSVP Utility Forum, led by Sacramento Municipal Utility District (SMUD) and the Platte River Power Authority. Models completed for these utilities were transformed into generic scenarios that preserved some situational characteristics, while replacing others, in order to increase model replicability. One additional case, demonstrating a Desert Southwest utility scenario, was developed expressly as a generic case, relying largely on published data.
All work related to the GAP analysis has been peer reviewed by staff at the US DOE National Renewable Energy Laboratory and by SunShot contractors from the Regulatory Assistance Project. To the extent that it must be customized for each utility situation, it remains a work in progress. In addition, development of the GAP methodology highlighted needs for continued verification of solar values, including some unconventional, strategic values, which are not in typical utility value-of-solar rate proceedings. The GAP methodology has immediate usefulness as a streamlined way for utilities to arrive at good procurement and pricing decisions. Even so, the CSVP appreciates feedback through our contact page, to support continued refinements.
All work related to the GAP analysis has been peer reviewed by staff at the US DOE National Renewable Energy Laboratory and by SunShot contractors from the Regulatory Assistance Project. To the extent that it must be customized for each utility situation, it remains a work in progress. In addition, development of the GAP methodology highlighted needs for continued verification of solar values, including some unconventional, strategic values, which are not in typical utility value-of-solar rate proceedings. The GAP methodology has immediate usefulness as a streamlined way for utilities to arrive at good procurement and pricing decisions. Even so, the CSVP appreciates feedback through our contact page, to support continued refinements.
| 2017_09_22_gap_southwest_1.pdf |
| 2017_09_22_central_ca_2.pdf |
| 2017_09_22_rocky_mountain_west_3.pdf |
A blog post from July 2017 offers a summary of how the GAP analysis could lead to a pricing solution that works with the tariff guidelines in effect at many utilities. A brief presentation on Pricing Strategy, by CSVP's John Powers, includes a summary of the adjusted PPA approach as well as adaptations of the bill-credit approach. For program designers who have not had experience with the regulatory principles and issues that drive the need for more innovative solar and DER pricing solutions, see Cliburn, J., Bourg, J., Mahar, E., et al., Ratemaking, Solar Value, and Solar Net Energy Metering: A Primer, SEPA, 2013. With permission, this publication of the Smart Electric Power Alliance is provided here.
| 2017_07_blog_adjusted_ppa_cliburn.pdf |
| 12_2017.06.18_extensible_powers_1_.pdf |
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Twelve Community-Solar Pricing Strategies for U.S. Utilities is an illustrative summary of strategies from utilities in Arizona, California, Colorado, Massachusetts, Iowa, Minnesota and Texas. In each case, the summaries are written from the utility perspective, even though in several cases, state policies have dictated a relatively narrow role for the utility. CSVP embarked on this effort in order to show the range of program and pricing options currently in the marketplace. While each of the utilities featured have incorporated some best-practice elements into their plans, we do not attempt to rank or evaluate them.
| 2017_09_29_csvp_pricing_matrix_1_.pdf |
The SMUD program comprises a portfolio of shared-solar choices. Among these, three speak directly to the CSVP mission: (1) community solar for new residential developments, (2) a program for commercial customers that includes an electric vehicle (EV) demonstration, and (3) a program that addresses low-income customer needs. Note: This document is in review and will be posted soon.
| solarshares_appa_presentation_november_7_d_1_.pdf |
Addressing Pricing for Low- and Moderate Income Households (2024)
A new addition (2024) to the CSVP collection of resources is a presentation provided by Cliburn and Associates, under a National Community Solar Partnership Technical Assistance project with Colorado-based Tri-State G&T. This downloadable presentation is provided below. It includes updated recommendations on program design and pricing for participation of low- to moderate-income households. The version of the "modified Elevate" community solar business case tool, which is used to illustrate scenario outcomes, is available upon request and will be here posted in Q1 2024.
| final_presentation_version_tri-state___local_community_solar_12_18_2023.pdf |