Implications of Rate Design for the Customer-Economics of Behind-the-Meter Storage
This work provides insights for the two main sources of bill savings for residential and commercial customers – demand charge reductions and arbitrage of energy charges – considering a range of customer profiles and retail rate designs. Storage can reduce monthly demand charges, which are dependent on the customer’s billing demand in kW rather than the amount of energy they consume in kWh, by charging during times of low energy consumption and discharging during peak consumption hours, thereby reducing peak power consumption from the grid. Storage can also reduce electricity bills by charging the storage during low-priced hours and discharging during high-priced hours, taking advantage of price-differentials of time-varying rates. This study considers a variety of demand charge designs and rates that allow for energy arbitrage.