Abstract:
This paper quantifies the effect of distributed solar generation on distribution feeders using unique, proprietary data from individual solar installations and feeders in Connecticut. We find that each additional kilowatt (kW) of distributed solar reduces the annual maximum feeder load and the top one percentile of feeder load by 0.11 kW. Using a matched difference-in-differences approach, we also find evidence of a 3.6% solar rebound effect, primarily occurring in spring and fall. Importantly, this rebound does not affect the impact of distributed solar on peak feeder loads, as these predominantly occur during the summer. Except in high-congested feeders, the economic value of deferred distribution capacity investment ranges from $0.3 to $2.9 per MWh, significantly below the cost premium of distributed solar compared to utility scale solar. Our findings imply that even in a summer-peaking system, distributed solar generation cannot be rationalized solely by savings from deferred distribution feeder investments.
Biography:
Dr. Shen is now an Associate Professor at the School of International and Public Affairs, Shanghai Jiao Tong University. He specializes in energy and environmental economics and policy. He obtained his Ph.D. degree in public policy (with a focus on energy economics) from the School of Public Policy University of Maryland, and completed his postdoctoral studies in energy economics at the Yale School of the Environment. His studies have been published in Nature Energy, Nature Communications, Environmental and Resource Economics, Resource and Energy Economics, and other academic journals.
This paper quantifies the effect of distributed solar generation on distribution feeders using unique, proprietary data from individual solar installations and feeders in Connecticut. We find that each additional kilowatt (kW) of distributed solar reduces the annual maximum feeder load and the top one percentile of feeder load by 0.11 kW. Using a matched difference-in-differences approach, we also find evidence of a 3.6% solar rebound effect, primarily occurring in spring and fall. Importantly, this rebound does not affect the impact of distributed solar on peak feeder loads, as these predominantly occur during the summer. Except in high-congested feeders, the economic value of deferred distribution capacity investment ranges from $0.3 to $2.9 per MWh, significantly below the cost premium of distributed solar compared to utility scale solar. Our findings imply that even in a summer-peaking system, distributed solar generation cannot be rationalized solely by savings from deferred distribution feeder investments.