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Commercial self-consumption of solar power
Information for plant designers
This article was originally published 2017 or before. The information may be outdated.
Since July 2010 any self-consumption of solar energy that exceeds the 30 percent mark will be compensated to a higher degree. At the same time, the power limit was increased from 30 to 500 kWp. Despite these changes, the overall goal of self-consumption compensation remains the same; namely, to offer a financial incentive for consumers to implement load management solutions and thus help lessen the burden on power grids.
The self-consumption of solar power is an attractive proposition for commercial energy consumers in particular. The main reason for this lies in their ability to consume a larger share of the solar energy they generate. How large that share is varies widely from case to case when compared to private self-consumption. After all, making general assumptions about the power of a PV plant is just as difficult as trying to estimate the level of energy consumption or the distribution of the usage periods throughout the day. Following studies on self-consumption in private homes, SMA has also carried out its own simulation analyses on the subject of commercial consumers. The objective was to estimate the potential for self-consumption among typical commercial consumers and determine the key factors that influence such consumption. The results can be used as a rough planning guide for interested installers and business owners, but also show how complicated this subject really is.
What does self-consumption of solar energy mean?
PV self-consumption is the consumption of PV energy which takes place directly at source or in the immediate vicinity – either immediately or delayed with corresponding intermediate storage. Self-consumption becomes commercially attractive for a company when the costs of PV generation are below the costs of purchased electricity. In this respect, a PV system should be designed to best meet the company's power consumption. In addition to the energy cost savings, self-consumption can also obviate the need for additional lines to the grid-connection point; furthermore, transmission losses resulting from energy transport in the utility grid are not a factor.
Figure 1 shows the 24-hour, almost constant load profile of a commercial enterprise with an annual electricity requirement of approximately 1 GWh and generation of a 300 kWp PV system on a cloudy summer's day. The self-consumption for the day (green area) equals the intersection of the generation (blue area) and the consumption (gray area).
Figure 1: Daily profile of a PV system with 300 kWp power generation and of a business consumer with almost constant load (Germany, cloudy summer's day): Over eight hours, the PV system meets almost the total electricity demand.
In times where the grid feed-in remuneration barely covers the costs, the most economical design variant involves matching the effective PV power generation to the company's basic load pattern, that is, to consume as much of the generated energy as possible on site. The critical key figure here is the self-consumption quota, that is, the PV energy consumed on site as a percentage of the total PV generation. The self-consumption quota can be determined for various time periods, however, the most useful value for planning purposes is the annual average value which takes account of seasonal fluctuations in consumption and generation.
What factors determine the commercial self-consumption rate?
In general, the determining factors are the same as for self-consumption in private homes: the amount of energy required, the amount of energy generated by the PV plant and of course the load profile, i.e., the distribution of energy demand over time. For commercial consumers, however, these factors fluctuate widely and hence make it almost impossible to determine a "typical" self-consumption rate.
The most important determining factor is the ratio energy generation to energy demand since that ratio effectively limits the maximum self-consumption rate. If the energy demand is sufficiently high, then an appreciable share of the generated solar power can be consumed directly, even if the peak times for consumption and generation differ. If, on the other hand, the amount of generated solar energy is disproportionately high, then only a small share of that energy will be consumed directly.
The next factor to be taken into account is the load profile: Since the time distribution of PV power is narrowly confined, the load profile is almost the sole determinant of how well energy generation matches energy consumption throughout the day. Consequently, the load profile has a thoroughly large effect on the self-consumption - but only if the ratio between energy generation and energy demand is well balanced.
Additional factors can be found in relation to energy generation, mainly with respect to the location and orientation of the PV plant. The location and orientation of a PV plant are known to not only affect the amount of energy yielded, but also how the energy is distributed throughout the day, which is an important consideration for self-consumption. For example, orienting the PV generator to the west would move the peak time for generation to late afternoon while orienting it to the east would move it to the early morning. If a business experiences its highest energy demand in the evening hours, then simply orienting the PV plant to the west can increase self-consumption rate by around seven percentage points. However, orienting the PV generator to the west for this reason alone may not prove very effective since the absolute reduced yield of approx. 15 percent is much more decisive than the increase of the self-consumption.
The location of the PV plant also affects more than just the amount of the specific energy yield. Irradiation conditions (influenced by wind, clouds, morning mist, etc.) can also vary greatly and hence change the amount of self-consumption by a few percentage points.
Self-consumption based on load profiles
To get a rough overview of possible self-consumption rates for various businesses, it makes sense to start with the load profiles. Almost any business can be assigned a standard load profile from the German Association of Energy and Water Industries (BDEW) while plant power and energy demand can vary regardless of the load profile. These load profiles are also used by utility companies for planning purposes. Moreover, each profile differentiates working days, weekends and seasons (not depicted here). This differentiation is an attempt to represent the seasonal changes in consumption on the one hand and the various weekly load profiles on the other. If commercial power consumers are now assigned to these load profiles, the percentage range of the potential amount of self-consumption can be specified for each one of those consumers (Fig. 2). As the figure shows, the ranges of values overlap to a large degree due to the aforementioned influence of the plant's power and the individual energy demand.
Despite the overlap, the effects of the various load profiles are evident. Take, for example, a Dairy cattle farming (L1 profile): In this case energy is needed primarily in the morning and in the evening - for the milking machines and the immediate cooling of fresh milk. As these particular times inherently limit the amount of energy that PV plants can supply, the potential self-consumption of 20 to 70 percent is less than that found in non-stop business operations (G3 profile). One example of such a business operation would be a supermarket where various refrigerated display cases need power around the clock, seven days a week. Depending on energy demand and generation, self-consumption rates of up to 100 percent can be achieved with this profile. The G4 load profile includes conventional retail stores, department stores and furniture outlets. In this profile, no power is consumed on Sundays, which means the maximum amount of self-consumption is lowered to 90 percent.
Although it may be possible to optimize the load profile to increase self-consumption among commercial consumers, doing so is extremely difficult. As a general rule, production processes and operating workflow should neither be interrupted nor changed. That aside, the costs of additional storage solutions (for compressed air, heat, cooling, etc.) often far outweigh the savings gained from increasing the amount of self-consumption. Nonetheless practical solutions may be available in some cases; for example, in the ventilation of industrial complexes where the existing control unit of the ventilation system can take into account the appropriate signals of a PV plant (and those of the energy consumption meter).
Self-consumption for individual businesses
The relatively wide range of values for the individual load profiles is of little use in making planning estimates. To determine a more accurate level of self-consumption quota for a particular business, the PV power and the energy demand must be considered in addition to the load profile since the relationship between those two variables is critical in determining self-consumption.
The result is illustrated in Figures 3a and b: the six load profiles considered are shown again, each supplemented with an additional diagram. Depending on the PV power and the annual demand for electricity, the maximum achievable level of self-consumption can be read directly. Two examples: a dairy farm (profile L1) with an annual requirement of 50,000 kWh and a PV system with 30 kW peak power can expect approximately 55 percent self-consumption. In contrast, for a business operating on business days only (profile G1), with a requirement of 1,000,000 kWh and a PV system with 200 kWp, the attainable quota is as high as 85 percent.
However, the readable percentages must not hide the fact that there are several uncertainty factors that will affect the final result. The actual consumption profile of a business, for instance, never exactly matches one of the standard load profiles, which means there is always an element of uncertainty when selecting a profile. Large loads with short duty cycles are also critical for self-consumption since they slightly exceed the available PV power and are not visible on a standard load profile. The aforementioned effects of the orientation and location of the PV plant also add some uncertainty to the results.
Energy demand and electricity price
Whether self-consumption of solar power is a better deal than conventional feed-in depends almost entirely on the price of the purchased electricity: if it exceeds the cost of solar power generation then self-consumption becomes financially attractive. The price of purchased electricity, however, depends greatly on the level of power consumption. Whereas small retail stores and offices in Germany typically pay at least 20 cents net, larger industrial consumers will normally pay less than 12 cents per kilowatt hour. The advantage of higher self-consumption quotas among larger consumers is offset by the lower margin of self-consumption.
The definitive assignment of a business to a load profile, to an energy requirement category, and to a typical electricity price is ultimately not possible: there are smaller supermarkets and larger supermarkets, agricultural operations of different sizes and differing special tariffs for purchased electricity. However, the amount of power purchased on a regular basis can be determined during the very first meeting with a potential plant operator - just take a quick look at the last electricity bill.
In light of the complex issues involving "self-consumption", plant designers are faced with several challenges. Nonetheless, self-consumption offers plant designers the opportunity to stand out with professional and competent consulting services. The diversity of business situations means that commercial consumers of electricity have a wide range of options when it comes to self-consumption. The SMA planning and simulation software, Sunny Design, is a useful tool in this regard.
The determining factor for self-consumption is primarily the relationship between nominal PV system power and energy requirement, the relevant load profile plays a subordinate role. The results of simulation also show clearly that business consumers can typically achieve higher self-consumption quotas than can private households. As a result, self-consumption is an attractive option in many cases, especially since electricity prices are expected to rise in the medium term. These higher prices will increase the financial incentive even further. The self-consumption incentive may certainly be the determining factor in convincing consumers to install PV systems in high demand areas and thereby lessen the burden on the utility grid.
Background: Optimized design of PV systems for commercial use of solar power
Using example days throughout the year, the graphic illustrates why it is only possible to achieve an optimal plant design, from an energy perspective, if the annual load and generation profiles are known:
Image A (June, sunny) shows the maximum PV power generation which significantly exceeds the basic load. The excess energy would be available for flexible operational loads and storage or to curtail the power generation from cogeneration. Otherwise, the excess electricity is fed into the utility grid if there is no limitation on feed-in power.
Image B shows that the power generation on a cloudy summer's day can also be below the basic load, which then results in a self-consumption quota of 100 percent. Compared to images C and D, we can also recognize the significant influence of the seasons on PV generation.
Image C also shows that the PV system in these dimensions can cover a significant portion of the electricity requirement even in the transitional season.
For planning and simulation of an optimal plant design, from an energy perspective, SMA offers its web-based software solution Sunny Design. This free-of-charge program also enables you to use your own annual load profiles.