Thousands of utilities run power grids across the country, and each has its own electricity rate structures and rules for customer-sited solar power generation. Regional and national solar developers, who already have their hands full with financing, permitting and construction issues, can be hard-pressed to understand utility rates and rules, too.
Adding to the challenge is that utilities modify their pricing structures and rules all the time (and sometimes significantly, as is the case with NEM 2.0).
Tracking all of this is quite an undertaking. Fortunately, a few companies have popped up that do this work for solar firms.
One company is Energy Toolbase. By providing financial analysis for solar developers, Energy Toolbase helps them anticipate long-term financial outcomes, as they relate to the various—and often complex—utility rate structures. The subscription-based platform is hosted on the cloud and updated almost every day.
“It’s a never-ending process,” said Adam Gerza, vice president of business development at Energy Toolbase. “As utility rate tariffs get updated, we’re literally going to a page and transcribing those values into a database record.”
Energy Toolbase uses all the data it collects to generate two primary outputs that go hand-in-hand: a utility rate analysis and an avoided cost analysis. The utility rate analysis recreates a customer’s utility bills based on their load profile and utility rate schedule. The avoided cost analysis then takes into consideration the particular solar power and energy storage systems and quantifies the potential savings. Developers then take this information to the bank.
A number of end-to-end solar software programs integrate an analysis tool like Energy Toolbase, including Sighten, SolarNexus and MODSolar.
“Our tool is kind of on the end of the spectrum where it’s really powerful and robust and used in more sophisticated applications,” Gerza said. “We think the utility rate piece is so important in and of itself, it’s a required stand-alone solution.”
The typical Energy Toolbase customer is a sophisticated C&I developer, such as SunPower or NRG, Gerza said. But that could change as complex NEM 2.0 structures emerge. In fact, the Energy Toolbase team is working now to make the application more usable for residential teams.
“Utilities are rolling out more dynamic rate structures—NEM 2.0, dynamic pricing,” Gerza said. “Now residential teams need a more robust tool to run that analysis and present it clearly for a customer.”
Now they’ve developed a tool that financiers themselves are using, Gerza said.
“When those guys are underwriting a project, they look at any number of project-level inputs to produce that final underwritten contract, and we’ve established a name for ourselves as a bankable avoided cost calculation,” Gerza said. “We’re doing it correctly, objectively. But at the end of the day you have to be transparent and able to defend that number.”
Energy Toolbase, which debuted at Intersolar 2014, was founded by John Gurski, who had been in project development for 10 years. Gerza met him eight years ago and has a background in utility rate analysis.
“This is the tool we wish we had when doing commercial development eight years ago,” Gerza said.