Technical Report

NREL/TP-6A2-43537

July 2009

Rate Analysis of Two 

Photovoltaic Systems 

in San Diego 

Elizabeth Doris, Sean Ong, and 

Otto Van Geet
National Renewable Energy Laboratory

1617 Cole Boulevard, Golden, Colorado 80401-3393

303-275-3000 • www.nrel.gov

NREL is a national laboratory of the U.S. Department of Energy

Office of Energy Efficiency and Renewable Energy

Operated by the Alliance for Sustainable Energy, LLC

Contract No. DE-AC36-08-GO28308

Technical Report

NREL/TP-6A2-43537

July 2009

Rate Analysis of Two 

Photovoltaic Systems 

in San Diego 

Elizabeth Doris, Sean Ong, and 

Otto Van Geet

Prepared under Task No. PVC7.92LA
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iii

Acknowledgments

This work is made possible by the U.S. Department of Energy Solar Energy Technology 

Program, through the San Diego Solar America Cities Grant. The authors thank Tom Blair and 

Linda Pratt of the City of San Diego, as well as Andrew McCallister of the California Center for 

Sustainable Energy, for their assistance in the development and reviews of this work. The 

authors also thank Michelle Kubik for her editing and production of the report. Any remaining 

errors, of course, remain the responsibilities of the authors. 
iv

Table of Contents

Abstract ......................................................................................................................................... iv

1. Introduction ................................................................................................................................1

2. Methodology and Data Sources ................................................................................................2

Tool ............................................................................................................................................2

System Information and Data ....................................................................................................2

Rate Information ........................................................................................................................3

3. Results .........................................................................................................................................4

3.1 5530 Kiowa ..........................................................................................................................4

3.2 5540 Kiowa ..........................................................................................................................7

4. Conclusions/Discussion ............................................................................................................11

References .....................................................................................................................................12

List of Figures 

Figure 1. 5530 Kiowa load profile (3/10/07) ...................................................................................4 

Figure 2. 5530 Kiowa load profile (7/27/07) ...................................................................................5 

Figure 3. 5540 Kiowa load profile (2/14/07) ...................................................................................7 

Figure 4. 5530 Kiowa load profile (7/14/07) ...................................................................................8 

Figure 5. Rate and PV production coincidence (PAT1D) - summer ...............................................8 

Figure 6. Rate and production coincidence - winter ........................................................................9 

List of Tables 

Table 1. Building and System Comparison .....................................................................................2 

Table 2. Rate Structure Scenarios Used in Analysis ........................................................................3 

Table 3. 5530 Kowa Electric Bill Comparison Table ......................................................................5 

Table 4. 2007 PV System Savings over Case with No PV System .................................................6 

Table 5. Summary of PV System Savings over PAT-1D Rate ........................................................6 

Table 6. 5540 Kowa Electric Bill Comparison Table ......................................................................9 

Table 7. 2007 PV System Savings over Case with No PV System ...............................................10 

Table 8. Summary of PV System Savings over PAT-1D Rate ......................................................10 
v 

Abstract 

Analysts have found increasing evidence that rate structure has impacts on the economics of 

solar systems (e.g., Wiser et al. 2007, Borenstein 2007). This paper uses 2007 15-minute interval 

photovoltaic (PV) system and load data from two San Diego City water treatment facilities to 

illustrate impacts of different rate designs. The comparison is based on rates available in San 

Diego at the time of data collection and include proportionately small to large demand charges 

(relative to volumetric consumption), and varying on- and off- peak times. 

Findings are twofold for these large commercial systems: 1) transferring costs into demand 

charges does not result in savings and 2) changes in peak times do not result in a major cost 

difference during the course of a year. While lessons learned and discussions on rate components 

are based on the findings, the applicability is limited to buildings with similar systems, 

environments, rate options, and loads. 
1 

1. Introduction

Solar photovoltaic (PV) systems are touted as beneficial under certain circumstances because of 

their long-term economic and external benefits (Smeloff 2005). Long-term system economics 

depend on geography, available incentives, maintenance practices, competing energy costs, the 

ability and value of exporting the energy, the rate structure under which the system is operating, 

and the ratio of system capacity to building load (Wiser et al. 2007). While methodologies are 

developed for understanding many of the factors affecting PV systems, the impact of rate 

structure varies based on system size, building load, and capacity relative to building load, 

resulting in a complicated relationship that is difficult to generalize. 

The impact of rates on PV systems is increasingly studied as more site-specific data becomes 

available. While generalizations about rates are still challenging due to the high levels of rate 

design and system configuration variation, it is likely that the economics of PV that are greatly 

assisted by rates that reflect the actual value to the utility system and the customer. This paper 

adds to the body of literature by evaluating different rate structures on two co-located, netmetering eligible,1 0.5 MW scale, solar PV installations serving two separate buildings, both 

with mid-day peaks, in San Diego, California. 

As of January 2009, the San Diego area has 50 MW of installed PV, all connected to the local 

utility grid of San Diego Gas and Electric (SDG&E). The City of San Diego has been a regional 

leader in PV implementation, with 1.4 MW of PV currently installed on city facilities. In San 

Diego, there is increasing emphasis on solar power as an important source of in-region 

generation. It’s also recognized for its potential to improve reliability, hedge future rate 

increases, decrease regional carbon emissions, and diversify the resource base. The city has 

invested in multiple solar PV systems and measurement equipment to evaluate system 

effectiveness for both cost and energy reliability. To determine the viability of future 

investments, it is important to understand the impacts of those PV systems on the city’s cost of 

energy, as well as greater impacts on the grid. 

A detailed understanding of each rate, combined with load data from particular facilities, 

provides a solid basis for analysis that can inform energy-management decision making. The 

wealth of data collected on the San Diego systems will help analyze the relative impact of 

different rates on the specific solar PV systems and their associated electricity loads, which is 

vital information for city officials going forward. 

This paper uses the first year of 15-minute interval load and production data from the systems to 

identify and determine how rates impact the cost-effectiveness of the system. The comparison is 

based on rates available in San Diego at the time of data collection and include proportionately 

small to large demand charges (relative to volumetric consumption), and varying on- and offpeak times.

 

1 Under energy net-metering, the electric customer avoids consumption from the grid with each kilowatt-hour (kWh) 

produced on-site, thus is implicitly credited with the retail value of that energy. Momentary (net) overproduction is 

also credited at the retail energy rate.
2 

2. Methodology and Data Sources

Tool

The Microsoft Excel-based tool used in this analysis is specifically designed to evaluate the 

impact of different rates on photovoltaic systems for any location throughout the United States. 

By combining the ability to analyze both energy and demand charges, the tool can be used to 

assess the financial benefit of stand-alone PV systems and PV systems integrated with a specific 

building or load. The accuracy of the tool, which is developed and housed at the National 

Renewable Energy Laboratory (NREL), is verified by comparing its data with actual utility bill 

data from the period of data collection.

The tool requires 15-minute data on building load and system production, as well as energy rate 

and demand charge information from a utility rate book. The tool precisely aligns the 15-minute 

load data with the 15-minute PV production to determine the reduction in demand for each 15-

minute segment. The tool then matches each 15-minute segment to the electricity rate that is 

applicable during that time, which is used to determine the energy and demand charges. The tool 

summarizes the energy, demand, and cost savings for the various time segments, which allows 

analysts to identify the beneficial components in each rate structure related to the PV system. 

System Information and Data

The systems tested here are two independent but co-located systems, which are owned and 

operated by Sun Edison under a power purchase agreement (PPA) with the City of San Diego. 

Both systems have PV panels mounted on open racks sloped 15 degrees. The facilities and the 

systems, identified by their addresses, have the following characteristics:

• 5530 Kiowa: a 495 kW alternating current (AC) system atop water treatment reservoirs 

that provides power for the water-testing lab building and pumping station. This system 

faces 45 degrees west of south.

• 5540 Kiowa: a 450 kW AC system also atop water treatment reservoirs that provides 

power for a drinking water pumping and pressurization system. This system faces south. 

The system data are provided by the City of San Diego, based on a metering system installed at 

the site. Table 1 summarizes the differences between the building loads and systems. 

Table 1. Building and System Comparison

Building Type Address

5530 Kiowa 5540 Kiowa

Load Type Single mid-day peak

Average 15-minute interval 

electricity use

40-60 kWh 80-100 kWh

PV System Size 495 kW AC 450kW AC
3 

Rate Information

San Diego has multiple rates to choose from, which is a major benefit in the analysis. In 2007, 

SDG&E offered large users the opportunity to choose different peak and semi-peak times. These 

rates, called the PA-T-1A through PA-T-1D, allow for a detailed analysis of differences in peak 

times for real systems. 

The nine rate structures used in the analysis (Table 1) are publicly available commercial rates for 

SDG&E. During the data year, SDG&E piloted several rate structures (PA-T-1A through D) that 

had common electricity and demand charges, but different peak, mid-peak (sometimes called 

“shoulder”), and off-peak times. The stated purpose of those rates was to allow consumers to 

optimize their energy costs based on highest periods of use. Both test systems in this analysis 

used rate PA-T-1-D in 2007. The energy charge rates for all of these time-of-use (TOU) options 

are the same:

• On-peak: summer $0.113/kWh, winter $0.111/kWh 

• Semi-peak: summer $0.095/kWh, winter $0.102/kWh. 

• Off-peak: $0.077 

In addition to the PAT-1 rates, the analysis applies other available rate structures to the data to 

determine impact of those rates on the economics of the solar installations. Some of these rates 

were available during the time period for the data collection (2007), but not all were applicable 

to these systems due to PV system size or building load requirements. Nonapplicable rates 

include AL-TOU, A6-TOU, A, and DWR. The final rate in Table 2, DG-R, became available 

after collecting the testing data. The DG-R rate was analyzed to approximate the impacts of 

reducing volumetric charges and increasing non-by-passable demand charges. 

Table 2. Rate Structure Scenarios Used in Analysis (timing is for both electricity and demand 

charges) 

Rate Season

On-Peak Semi-Peak 1 Semi-Peak 2

Start End Start End Start End

PAT1B Summer 12:00 PM 3:00 PM 6:00 AM 12:00 PM 3:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

PAT1C Summer 12:00 PM 4:00 PM 6:00 AM 12:00 PM 4:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

PAT1D Summer 1:00 PM 3:00 PM 6:00 AM 1:00 PM 3:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

PAT1E Summer 1:00 PM 4:00 PM 6:00 AM 1:00 PM 4:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

ALTOU

Summer 11:00 AM 6:00 PM 6:00 AM 11:00 AM 6:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

A6-

TOU

Summer 11:00 AM 6:00 PM 6:00 AM 11:00 AM 6:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM

A

Summer

Winter Flat Rate

DWR Summer

Winter Flat Rate

Proxy 

DGR

Summer 11:00 AM 6:00 PM 6:00 AM 11:00 AM 6:00 PM 10:00 PM

Winter 5:00 PM 8:00 PM 6:00 AM 5:00 PM 8:00 PM 10:00 PM
4 

3. Results

3.1 5530 Kiowa

Figures 1 and 2 present typical summer and winter building load curves overlaid with solar 

installation production data for 5530 Kiowa. The building load is a typical mid-day single peak, 

and PV production has a nearly peak that nearly coincides with peak demand. During the 

summer, the peak production of the system is generally matched to and greater than the building 

load peak. 

Figure 1. 5530 Kiowa load profile (3/10/07) 
5 

Figure 2. 5530 Kiowa load profile (7/27/07) 

Table 3 summarizes the rate-impact results, which show that the rate that the system was 

functioning on, PA-T-1D & -1E, was the most cost-effective of the available rates at the time of 

data collection (PA-T-1C-F), for a total cost of about $117,000. 

Table 3. 5530 Kiowa Electric Bill Comparison Table (annual) 

Rate Structure Demand Charges Electricity Charges Total Bill Charges

PA-T-1 C $37,975 $80,165 $118,140

PA-T-1 D $36,947 $80,165 $117,112

PA-T-1 E $36,884 $80,165 $117,049

PA-T-1 F $39,866 $80,165 $120,031

AL-TOU $52,087 $81,743 $133,830

A6-TOU $57,451 $78,604 $136,055

A $0 $96,478 $96,478

DWR $0 $93,926 $93,926

DGR (proxy) $16,160 $116,264 $132,424

Assuming the same rate structure with and without a PV system, the PV system results in a 

savings of between 43% and 51% of total annual electricity billed costs (Table 4). Table 5,

however, presents a more realistic scenario for estimating the overall value of the system because 

the case with no PV system is associated with a single rate – in this case, the PA-T-1D rate. 

Tables 4 and 5 illustrate that rates with lower demand charges result in higher bill savings for 

the PV installation relative to no system. It is clear that the rate approximating DGR (proxy rate) 
6 

provides the largest savings for a solar installation when measured relative to the same rate 

without a solar installation. However, the 2007 applicable rates with the largest cost savings 

relative to no system are the PAT-1-C-E rates. If the building qualified for the DWR rate, that 

would have the largest positive economic impact on the system over a basic time-of-use rate 

such as the PAT1D in the absence of a system. The result is that the time-of-use rates with lower 

demand charges provide more savings for this solar installation than those with higher demand 

charges.

Table 4. 2007 PV System Savings ($) 

over Case with No PV System (same 

rate)

Rate Structure Total

PA-T-1 C 46%

PA-T-1 D 46%

PA-T-1 E 46%

PA-T-1 F 45%

AL-TOU 44%

A6-TOU 43%

A 48%

DWR 47%

DGR (proxy) 51%

Table 5. Summary of PV System Savings over PAT-1D Rate

Rate Structure

Annual Building Energy Costs Savings over 

no system at 

PAT-1-D 

Rate

Savings over 

no system at 

No PV (PAT-1-D) With PV System PAT-1-D Rate

PA-T-1 C

$218,421

$118,140 $100,281 46%

PA-T-1 D $117,112 $101,309 46%

PA-T-1 E $117,049 $101,372 46%

PA-T-1 F $120,031 $98,390 45%

AL-TOU $133,830 $84,591 39%

A6-TOU $136,055 $82,366 38%

A $96,478 $121,943 56%

DWR $93,926 $124,495 57%

DGR (proxy) $132,424 $85,997 39%

This building load is primarily coincident with peak production, resulting in high levels of 

demand savings over the course of 2007. For the actual rate option used by the system in 2007 

(PA-T-1D), the demand savings resulted in $101,309 in savings, or a 46% total bill reduction for 

the facility. If the demand-charge reductions remain consistent over the life of the system, the 

demand savings radically increase the system economics. However, demand is measured every 

15 minutes, and charged for the highest point in a month. Therefore, if that peak moment is hit 

coincident with a low production moment (e.g., a cloud passing over), savings will vary year to 

year, and could be offset by a few low production days, especially given the stability of the 

building load. 
7 

3.2 5540 Kiowa

Figures 3 and 4 represent typical summer and winter building loads for this site. The load at this 

site has relatively higher average daily load, making the peak relatively smaller than the one at 

5530 Kiowa. Figure 5 illustrates the coincidence of the peak periods in the time-of-use rate 

structure offered to 5540 Kiowa and the solar PV production. This coincidence is critical to the 

system economics and involves coordinated rate and system design. 

Figure 3. 5540 Kiowa load profile (2/14/07) 
8 

Figure 4. 5540 Kiowa load profile (7/14/07) 

Figure 5. Rate and PV production coincidence (PAT1D) – summer
9 

0.06

0.07

0.08

0.09

0.1

0.11

0.12

0

50

100

150

200

250

300

350

400

450

1 3 5 7 9 11 13 15 17 19 21 23 1 3 5 7 9 11 13 15 17 19 21 23

kWh

$/kWh

Rate Structure and PV Production - Winter Rates

PV Production

Rate

Figure 6. Rate and production coincidence – winter

Table 6 summarizes the rate-impact results, which show that the rate that the system was 

functioning on, PA-T-1D was the most cost-effective of the available rates at the time of data 

collection (PA-T-1C-F), for a total cost of about $46,576. 

Table 6. 5540 Kiowa Electric Bill Comparison Table (annual) 

Rate Structure Demand Charges Electricity Charges Total Bill Charges

PA-T-1 C $45,596 $3,359 $48,956

PA-T-1 D $43,216 $3,359 $46,576

PA-T-1 E $44,606 $3,359 $47,966

PA-T-1 F $51,686 $3,359 $55,046

AL-TOU $60,268 $2,916 $63,184

A6-TOU $65,822 $3,218 $69,040

A $0 $16,343 $16,343

DWR $0 $12,645 $12,645

DGR (proxy) $19,163 -$325 $18,838

Assuming the same rate structure with and without a PV system, the PV system results in a 

savings of between 63% and 89% of total annual electricity billed costs (Table 7). Table 8,

however, presents a more realistic scenario for estimating the overall value of the system because 

the case with no PV system is associated with a single rate – in this case, the PA-T-1D rate. 

Tables 7 and 8 illustrate that rates with lower demand charges result in higher bill savings for 

this PV installation relative to no system. Similar to the system at 5530 Kiowa, the rate 
10 

approximating DGR (proxy rate) provides the largest savings for a solar installation relative to 

the same rate without a solar installation. However, when measuring savings between the rates, 

assuming a PV system, the PAT-1-C-E rates offer the largest savings. The result for this system 

as well, then, is that the time-of-use rates with lower demand charges provide more savings for 

this solar installation than those with higher demand charges. 

Table 7. 2007 PV System Savings ($) 

over Case with No PV System 

(same rate)

Rate Structure Total

PA-T-1 C 70%

PA-T-1 D 72%

PA-T-1 E 71%

PA-T-1 F 66%

AL-TOU 66%

A6-TOU 63%

A 86%

DWR 88%

DGR (proxy) 89%

Table 8. Summary of PV System Savings over PAT-1D Rate

Rate Structure

Annual Building Energy Costs Savings over 

no system at 

PAT-1-D 

Rate

% savings over 

no system at 

No PV (PAT-1-D) With PV System PAT-1-D Rate

PA-T-1 C

$165,732

$48,956 $116,776 70%

PA-T-1 D $46,576 $119,156 72%

PA-T-1 E $47,966 $117,766 71%

PA-T-1 F $55,046 $110,686 67%

AL-TOU $63,184 $102,548 62%

A6-TOU $69,040 $96,692 58%

A $16,343 $149,389 90%

DWR $12,645 $153,087 92%

DGR (proxy) $18,838 $146,894 89%
11 

4. Conclusions/Discussion

This report provides analysis of different utility rates on two PV systems in San Diego, 

California. It provides a study of two relatively same-sized, co-located systems on buildings with 

different load profiles. Rates available during the time of system measurement, as well as a 

proxy rate illustrating increased demand charges relative to volumetric charges, are evaluated. 

Findings indicate that changes in peak timing did not have a major effect on the economics of the 

system over the course of a year, and that increased demand charges relative to volumetric 

charges do not increase the economic value of these two solar systems. 

The results support existing literature on the importance of relative sizing of PV systems and the 

load being served (Wiser et al. 2007). The system installed at 5530 Kiowa is oversized relative to 

peak load, and 5540 Kiowa is sized to meet peak demand. As a result, the 5540 Kiowa system, 

under all rates tested, offsets more of the energy costs of the building. 

Regarding the most beneficial rate structures, those that exhibit the greatest benefits all have 

lower demand charges and time-of-use rates, which peak during peaks in PV production. 

Typically, a utility will provide a TOU rate that has a high peak charge and a low off-peak 

charge. Such rate structures encourage customers to shift their electricity use to off-peak times, 

making it a good demand-side management tool for the utility. Solar PV system owners benefit 

from TOU rates because of the low off-peak charges and because a PV system typically reduces 

their electricity imports during peak hours. A rate structure that peaks during the hours of PV 

production will have the greatest benefit to the system owner. 

For a TOU rate to be beneficial, the PV system needs to be designed to provide the bulk of the 

electricity load for the building. If not, the high-price electricity purchased on-peak will offset 

the savings provided by the system. It is the combination of low off-peak rates and low energy 

use during peak hours (due to the PV system’s contribution) that results in the savings. However, 

even if the system is undersized relative to building load, the high peak prices have the benefit of 

increasing the value of the PV production and reducing system payback periods. 

Finally, demand charges are not an effective benefit for PV system owners because the charge is 

based on the maximum use during a billing period (usually a month). Even one cloud passing 

over a PV system during peak building load may cancel the effect of demand-charge savings. 

Consider, for example, a PV system that reduces a building’s peak demand 29 days out of a 30-

day billing period; the customer will be charged for their peak demand, which occurred on the 

one day that the PV system had reduced function (perhaps due to cloud cover). Thus, the 29 days 

that the PV system did reduce the customer’s peak load, becomes irrelevant. Only the highest use 

is billed. In reality, it may only take a 15-minute cloud cover for this effect to be true. 
12 

References 

Borenstein, S. (2007). “Electricity Rate Structures and the Economics of Solar PV: Could 

Mandatory Time-of-Use Rates Undermine California’s Solar Photovoltaic Subsidies?” Center 

for the Study of Energy Markets paper CSEMWP-172. 

http://repositories.cdlib.org/ucei/csem/CSEMWP-172 

Smeloff, E. (2005). “Quantifying the Benefits of Solar Power for California.” White paper for 

the Vote Solar Initiative. Accessed at 

http://www.votesolar.org/tools_QuantifyingSolar'sBenefits.pdf

Wiser, R.; Mills, A.; Barbose, G.; Golove, W. (2007). “The Impact of Retail Rate Structures on 

the Economics of Commercial Photovoltaic Systems in California.” Accessed March 2009 at 

http://repositories.cdlib.org/cgi/viewcontent.cgi?article=5510&context=lbnl. 
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Rate Analysis of Two Photovoltaic Systems in San Diego

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14. ABSTRACT (Maximum 200 Words)

Analysts have found increasing evidence that rate structure has impacts on the economics of solar systems. This paper 

uses 2007 15-minute interval photovoltaic (PV) system and load data from two San Diego City water treatment facilities 

to illustrate impacts of different rate designs. The comparison is based on rates available in San Diego at the time of data 

collection and include proportionately small to large demand charges (relative to volumetric consumption), and varying 

on- and off- peak times. Findings are twofold for these large commercial systems: 1) transferring costs into demand 

charges does not result in savings and 2) changes in peak times do not result in a major cost difference during the 

course of a year. While lessons learned and discussion on rate components are based on the findings, the applicability is 

limited to buildings with similar systems, environments, rate options, and loads. 

15. SUBJECT TERMS

NREL; renewable energy; RE; California; San Diego; City of San Diego; Elizabeth Doris; Sean Ong; Otto Van Geet; 

solar photovoltaics; solar; PV; building energy; demand charges; water treatment facilities; peak load; rate options 

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