An optimization approach to parallel generation solar PV investments in the U.S.: Two applications illustrate the case for tariff reform

We construct a model to optimize the economics of distributed generation photovoltaics (DGPV) for a parallel generation (behind-the-meter) application. Applying the model to the short-interval load and insolation data for two similar dairy operations in the U.S. Upper Midwest region, we find that highly site-specific differences in parameters lead to strikingly divergent results. Operating behind-the-meter strongly rewards real-time concurrence between on-site generation and on-site load. Compared to operating under a value of solar tariff (VOST) or net energy metering (NEM), we argue that parallel generation tariffs amplify the existing, irreducible uncertainties of project economics, and discourage DGPV investment.