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Suggested regulatory improvement for solar energy

image credit: who should pay the "wire fees"?
Rafael Herzberg's picture
Consultant energy affairs Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

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  • Jun 24, 2020

Suggested regulatory improvement for solar energy

For those who want to look at sustainability in the long term, it will be interesting to consider this suggestion.

Include a demand charge for the use of the local concessionaire's network, in USD/kW. 

The local electric concessionaire invests in the system and needs to be remunerated. If there is no charge from those who use it, this cost is transferred to "everyone else".

This charge enables transactions (surplus sales and purchases) inherent to a solar system in a healthy environment.

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Jim Stack's picture
Jim Stack on Jun 24, 2020

A demand charge would work and be accepted if you also include a reward for those who reduce during Peak Hours when the demand charge would be in force. Just like the Net-Metering amount of credit you should give the clean solar power added during Peak Hours the same credit as they charge customers for clean power. With the right incentives people will respond and help the GRID. 

Rafael Herzberg's picture
Rafael Herzberg on Jun 24, 2020

Hi Jim,

Actually time of use rates are designed to stimulate energy users shift from on-peak to off-peak. So whenever TOU are actually offered then it is a win-win situation.

Solar energy in Brazil does not pay per capacity when it comes to using the grid to sell excess energy produced by a PV system. The PV owner gets the benefit of being able to sell excess energy and does not pay for kW capacity.

I see a just system if it is a binomial arrangement kW capacity and kWh energy. So a PV system is able to sell excess energy using the grid - it should pay kW capacity accordingly because the grid has its value, otherwise why should it be a free of charge mechanism? 

Actually other on-site power production arrangements such as peaking power, base load power and cogeneration are ususally associated to back up power contracts. They are designed so that when these on site systems are not operating (unplanned or planned interruptions), the grid takes over automatically and instatly. The business arrangement is a charge per kW and when the local grid is used there is a commodity fee also.

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