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Options for Solar and Wind Micro-generators to Minimize Transmission and Distribution Charges

January 12, 2012

A grid-tie solar/wind system in Alberta that is sized exactly to match an average annual load helps to avoid only a portion of transmission and distribution charges. One would legitimately argue why a distributed generation does not receive transmission and distribution credits for the power exported to the grid?

When a KWh of energy generated by solar panels or a wind turbine is sold to the grid, it stays in the distribution system. When this KWh is consumed by your next neighbor, your neighbor pays both transmission and distribution charges for this energy. As the KWh never leaves the distribution system, transmission system costs should either not apply to this KWh or credits for saving on transmission expenses shall be assigned to the distributed generator. We leave this argument to the micro-generation system designers and hope that they can address this problem in the future amendments.

Under the current regulation, micro-generation system owners are left with the two choices:

  1. add a battery back-up to the existing system, or
  2. build an oversized photovoltaic or wind system to be net-positive in order to offset the transmission and distribution charges.

The first option can be implemented by coupling an existing utility-interactive inverter with a battery-based inverter/charger, a concept known as AC Coupling. This implementation has numerous technical challenges and requires custom automation needed to draw the energy stored in the battery bank before drawing power from the grid and the ability of the battery-based inverter/charger to charge the batteries only when there is an excess of the solar or wind power.

The second option is to size the renewable system slightly larger than your needs. The credits earned on the energy side can be used to offset the costs on the distribution and transmission side of the bill as long as you have the same company representing an energy retailer and a wire service provider. It would be interesting to empirically determine if the offset mechanism works the same way when an energy retailer and a wire service provider are two different companies.

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