Analysis of Solar Energy Aggregation under Various Billing Mechanisms

Abstract: Ongoing reductions in the cost of solar photovoltaic (PV) systems are driving their increased installations by residential households. Various incentive programs such as feed-in tariff, net metering, net purchase and sale that allow the prosumers to sell their generated electricity to the grid are also powering this trend. In this paper, we investigate sharing of PV systems among a community of households, who can also benefit further by pooling their production. Using cooperative game theory, we find conditions under which such sharing decreases their net total cost. We also develop allocation rules such that the joint net electricity consumption cost is allocated to the participants. These cost allocations are based on the cost causation principle. The allocations also satisfy the standalone cost principle and promote PV solar aggregation. We also perform a comparative analytical study on the benefit of sharing under the mechanisms favorable for sharing, namely net metering, and net purchase and sale. The results are illustrated in a case study using real consumption data from a residential community in Austin, Texas.