Web-Based DER Assessments by Distributed Resources
Pitch
The Distributed Resources Web App will show simply and accurately how much SMEs can save with Distributed Energy Resources (DERs).
Description
Summary
The Distributed Resources Web App will show simply and accurately how much you can save on your electricity bills with net metered solar and other Distributed Energy Resources (DERs). Net metering uses solar to directly reduce your building's electricity consumption, rather than selling it to the grid. DERs can include battery storage, EV chargers, air-source heat pumps, etc.
The app will use data from electric meters and a proposed solar system or DER equipment. Savings will be calculated hour by hour and displayed in a 12 month and 20 year forecast of electricity bills.
Solar and DER installers currently engage consultants to investigate the potential for net metering in Ontario on an ad-hoc basis, or as is more likely do a rough estimate of savings themselves. Net metering policies are uncertain and unfamiliar, especially with Ontario’s many LDCs and rate classes. Interaction with utilities to obtain consumption data is time consuming and different case-to-case. Hiring a consultant to investigate each site’s potential savings is cost prohibitive and does not scale for either customers or installers - the cost of creating a report on a site can run in to the thousands of dollars.
The Web App will allow customers – solar developers – to evaluate opportunities with unprecedented scale, speed and depth of analysis.
As Ontario’s solar industry transitions from a FIT contracted procurement to net metering savings-centric model, uncertainty and risk are prevalent. Opportunities where net metering will be economic are hidden and unproven. The Web App will bring solar developers and a broader demographic of customers together in order to install solar for mutual benefit.
Desirability
How do you know that your solution is desirable to SMEs, and will reduce GHG emissions?
Ontario has a Fair Hydro Plan to lower electricity rates and introduce support programs; however, it will only protect against price increases for four years. Larger businesses can take advantage of Global Adjustment savings by enrolling in a program that allows them to reduce it during peak times. For many smaller community-scale businesses, the Plan and Global Adjustment programs do not apply and does not provide relief.
The media is filled with stories of Ontario small businesses hobbled by high energy prices, especially electricity bills (see References section below). Many of these business will (and are) moving to other jurisdictions where possible, or find that they cannot continue operating under the burden of energy costs.
At the same time, rate class structures have led to the economics of net metered solar PV in Ontario arriving at a very tenuous and highly charged crossroads. With the discontinuation of the FIT (Feed-In Tariff) and microFIT contracted procurements at the end of 2017, Ontario's market will be relying on net metering into 2018 to survive. The same is true for battery storage, EV charging and air-source heat pumps: with the cancellation of planned provincial incentives, the business case for these is unclear: for some business, certain DERs will make sense while others will not given their mix of transportation needs, electricity and heating bills, etc.
Energy costs can be proportionally among SMEs compared to larger companies. Larger companies are increasingly able to avoid energy costs through the use of DERs like solar and battery storage, or contract themselves for renewable energy projects. This allows them to avoid use of the electric grid, and in some cases completely divorce themselves from the electric grid - this trend is known in the industry as the “utility death spiral.” In this way, those without the means to investigate and invest in these DERs are left paying an increasingly large and onerous share of the legacy centralized energy system on which they depend. This trend is beginning to also play out in decentralized and clean technologies upending the traditional centralized systems in building heating (ground-source heat pumps, solar thermal or combined heat and power systems) and in transportation (plug-in and EVs, and eventually autonomous versions of such). It will be important for the value and opportunities offered by DERs to be visible to SMEs in order for them to keep pace.
Feasibility
What actions do you propose?
The Web App will promote the installation and use of DERs by SMEs - solar PV, battery storage, EVs and air-source heat pumps. By increasing the visibility of the DER opportunity, installers will be better able to make sales, and SMEs will be better able to evaluate proposals. As DERs gain a foothold in small businesses, word of mouth will cause a positive feedback loop in installations. This approach utilizes additional information on combinations of DERs, lessening the reliance on specific government incentives to drive the industry. A more grass-roots and sustainable approach to GHG reductions will result.
Funding will be used to develop a Web App that will use SME's bill data to analyze the value of DERs to their operations. Installers or SMEs will be able to access this analysis. If a sale is made, DERs will then reduce SME costs and increase their competitiveness, wile also reducing GHG emissions.
Initial development of the app has been estimated by developers at 8 weeks. After this, specific installers, SMEs, and other DER industry participants will be invited for a limited release of the Web App. An industry-wide release will follow, along with the execution of an engagement and marketing plan.
Who will take these actions?
What is needed to solve both these problems is a capability for solar developers to uncover economic opportunities for solar and DER development on a unprecedented scale, speed and depth. A software solution is necessary as proposals become customer specific and sales cycles shrink. Rapid, scalable investigation and identification of opportunities will lowers customer acquisition costs for solar installers.
Where will these actions be taken?
The Web App will operate throughout Ontario, but will be especially useful in LDC territories that have implemented the Green Button meter data standardhttp://greenbuttondata.ca
- Festival Hydro
- Guelph Hydro
- Hydro One
- Hydro Ottawa
- London Hydro
- North Bay Hydro
- Peterborough Utilities Group
- PowerStream
- Toronto Hydro
- Utilities Kingston
These 10 LDCs serve 60% of Ontario electricity customers.
What are the proposal’s projected costs?
After initial consultations with app development firms and contractors, it is estimated that the Web App will cost $75,000 and take 8 weeks. A more conservative feature set could also be considered, perhaps starting at $50,000.
A draft timeline of app development follows (from the time of developer go-ahead):
- Week 1: Scoping of technical requirements and signing contracts with developers.
- Weeks 2-4: Initial capability construction
- Week 5: Testing of new capabilities and identification of outstanding issues.
- Weeks 6-7: Capability build-out and final front end design implementation.
- Week 8: Final testing and verification of features.
Scalability
Once the solution is built and implemented describe a path forward for it to scale to other users/companies.
A service accurately modeling and predicting solar net metering performance would be useful to many parties throughout the solar industry value chain in Ontario. Installers and retailers of solar systems can use the service for marketing and sales. Those offering a no-money down solar leasing proposition (if third party ownership is allowed in Ontario) can use it both to model the expected value of their portfolio, as well as for the aforementioned individually tailored sales and marketing. Financiers would find the service useful to more accurately assess the individual revenue risks to debt coverage ratios etc.
Renewable energy and cleantech consultants can use the service to better model carbon savings, or the relative financial benefits of net metered solar compared to other technologies or as part of a portfolio of options. On the other side of the table, building owners can similarly better assess the value of solar net metering compared to alternatives. Professionals (legal, accounting etc.) can better tailor their services given the higher accuracy of financial forecasts from the service.
How will your solution lead to change on a larger scale over time (i.e. 3 to 5 years out)? How many businesses can potentially be affected by your solution?
Awareness and information on the costs and benefits of DERs is an important first step in planning methods for communities and marginalized groups to participate in this new decentralized and clean energy future.
As Ontario and jurisdictions around the globe experience accelerating pressure to reduce carbon emissions, a central strategic tenant is emerging: the decarbonization of the electricity industry, and the electrification of previously fossil-fueled industries. Thus, there is increasing pressure from government and policy makers to drive the adoption of electrically assisted or fueled building heating - like heat pumps - and plug-in electric vehicles in transportation.
By using a mix of DERs tailored to and economic for a specific SME, a grassroots carbon reduction can take hold outside of provincial incentives or direction.
It is estimated there are 2000 - 3000 businesses in Ontario that fall into the gap between the Fair Hydro Plan and Global Adjustment reduction programs - this includes up to 85% of Ontario factories. Approximately 60% of Ontario businesses have access to Green Button data through their LDCs.
What business and funding model have you considered for your solution to become sustainable?
It is envisioned the service would be priced for both individual quotes and a monthly subscription with unlimited quotes (the latter per user). A free trial, perhaps for a month, would drive marketing and adoption.
Impact
What impact will the proposed actions have on reducing greenhouse gas emissions?
DERs allow a multi-pronged attack on GHGs from SMEs, utilizing those that make sense for each SME in a custom package. Transportation, electricity and heating emissions can all be reduced through solar, battery storage, EVs and air-source heat pumps.
The recent Ontario GreenON Challenge used the following figures for Ontario GHG emissions reduction potentials:
- Electricity 0.043 kg CO2e / kWh
- Natural gas 1.899 kg CO2e / m3
- Diesel 2.754 kg CO2e/L
- Gasoline 2.462 kg CO2e/L
A conservative adoption scenario follows:
- SME electricity use of 250,000 kWh/year by 50%
- Four purchase EVs as a result of company EV chargers: 10,000 annual miles at 25 MPG per vehicle displaced
- 1% of SMEs in Ontario (e.g. 2000) participating after 5 years
This would equate to savings of 405 tonnes of CO2e annually, without looking at natural gas savings through air source heat pumps. Additionally, the competitiveness of SMEs would be improved.
What are other key benefits?
As well as savings for participating SMEs, additional societal benefits will result. GHGs reduction will take place as a result of these clean energy installations. The playing field between SMEs and larger multinational companies, and between Ontario and other jusrisdictions with different energy mixes, will be evened. On the installer side, a similar effect will take place - the "long tail" of smaller DER installers will be better able to compete with larger developers, and a more robust and distributed industry will result. With a long tail of installers, more economic activity will be generated for Ontario. A positive feedback loop will occur as initial installations by participating SMEs lead to individuals looking at DERs for their own homes.
About the Authors
Mr. Clare is an active and entrepreneurial member of Ontario’s clean energy industry, working within current procurement programs while at the same time investigating future solutions. He has worked in business development, application management, domestic content and other roles in a variety of both FIT and microFIT projects. He has worked in the development of CanSIA’s Distributed Generation Task Force, researching jurisdictional best practices and helping to create policy suggestions to be presented to government. Mr. Clare is a Canadian citizen residing in Toronto, Ontario.
Distributed Resources is an Ontario for-profit corporation incubated in the Centre for Urban Energy at Ryerson University.
Related Proposals (optional)
References
"Despite Wynne's rate drop, electricity costs continue to shock"https://www.theglobeandmail.com/report-on-business/small-business/sb-managing/electricity-costs-continue-to-plague-some-ontario-small-businesses/article34914906
"High hydro prices hurt Ontario factories, industry group says"https://www.cbc.ca/news/canada/kitchener-waterloo/kitchener-toronto-factory-industry-electricity-rates-1.4011519.
Maximizing community solar potential — all through an app"https://www.ryerson.ca/cue/news-events/blog/2016/09/maximizing-community-solar-app-distributed-resources.
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Distributed Resources
