Dealing with Solar Spills: Shared Solar, an Alternative Way to Pay for Distributed Solar Energy in the Residential Sector

As concerns for climate change and other environmental impacts of fossil fuels grow, there has been strong interest in promoting photovoltaic (PV), an increasingly viable renewable technology. However, while costs of installed PV are expected to continue to decline in future, returns from investing in distributed PV systems are much less certain. The issue of promoting solar has now shifted from a technological challenge to an economic problem; from how much solar systems cost, to how much should be paid for solar energy generated. In this thesis, I first survey the current methodologies used to account for solar energy produced by rooftop PV and discusses their limitations as long-term solutions. I then propose a new approach, shared solar, as a possible answer, where one household with PV uses the excess electricity to power neighboring houses and offset aggregate demand instead of selling the electricity back to the central grid. By modeling PV production and household electricity demand using software developed by the National Renewable Energy Laboratory, I demonstrate how shared solar could work in theory. I then discuss the logistics to make such a project happen in reality and the potential barriers ahead to promote shared solar on a large scale.