The promise of lower utility bills is a key motivator for most prospective solar customers, but time of use (TOU) rates — which charge different electricity prices depending on the time of day — add complexity to finding the best deal for the customer. Luckily, there are several strategies solar contractors can use to design the optimal PV system under specific TOU rates that will increase a customer’s solar savings and make your proposals more competitive.
1. Start with integrated system design and financial analysis tools
One of the first considerations for finding the best design for TOU rates is to make sure you’re using software tools that will let you easily and accurately determine how different design choices will impact the financial returns of your project.
The structure of TOU rates varies, with important differences in the time periods when different pricing applies. TOU rates can be very favorable for solar customers if peak price hours coincide with when PV systems produce the most. In other cases, like when peak price hours occur in the evening, TOU rates can reduce solar savings.
To get an accurate understanding of your customer’s savings, your financial modeling tools must take into account how much the PV system will produce at different times, combined with the exact structure of your customer’s TOU rate. Beyond that, integrated solar design and financial analysis software will allow you to quickly see how system design changes or alternative utility rates affect project economics.
2. Get smart about post-solar rate choices
A second consideration for saving your customer the most money with their solar installation is to familiarize yourself with their utility rate choices and the financial implications of different rates. In some cases, the solar customer only has one potential rate that they are eligible for, but other times (like for some PG&E customers) there are multiple options. If your customer has a choice between rates, make sure to explore the financial implications of different options.
Choosing the best rate can significantly improve the economics of the project. In a case study of a solar design for a medium-sized office building in PG&E territory in California, Aurora Solar found that choosing a different post-solar rate resulted in over $42,000 in additional savings over the lifetime of the project. In addition to the increased savings making your proposal more compelling, this kind of expertise can distinguish your company in the sales process.
3. Explore alternative azimuths for your PV design
Finally, contractors can also experiment with different azimuths (orientations) to adjust the timing of some of the array’s production. For example, if a system is facing west, it may produce less overall but have more production later in the day. In cases where peak hours are late in the day, there may be times when this makes sense.
Again, using an integrated program for solar design and financial analysis makes assessing the merit of these kinds of design changes a lot easier because you’ll more easily be able to compare the value of the solar energy produced, overall system production and other financial metrics like payback period.
Even if TOU rates have not arrived in your area yet, they are likely to be more common in the future. Getting smart about how to maximize your customers’ savings under TOU rates can help you stay ahead of the curve.
— Solar Builder magazine