Impact of Rate Design Alternatives on Residential Solar Customer Bills: Increased Fixed Charges, Minimum Bills and Demand-Based Rates

Utilities are proposing changes to residential rate structures to address concerns about lost revenue due to increased adoption of distributed solar generation. An investigation of the impacts of increased fixed charges, minimum bills and residential demand charges on PV and non-PV customer bills suggests that minimum bills more accurately capture utilities’ revenue requirement than fixed charges, while not acting as a disincentive to efficiency or negatively impacting low-income customers.

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