Concentric was engaged to evaluate the potential financial risks associated with on-site commercial and industrial (“C&I”) solar investments in designated U.S. markets. The client aimed to understand how potential changes in rate design and Net Energy Metering policies in specific states might impact investor returns associated with solar power purchase agreements (PPAs).
Our analyses considered current and future costs of service, the potential for changes in utility rate design, the regulatory environment of each state, estimates of solar penetration, and patterns of energy consumption and solar generation. We used these factors to create financial impact scenarios for both ratepayers without on-site solar and those with on-site solar PPAs. Our modeling replicated utility costs under specific C&I tariffs, calculating utility revenue shortfalls and the cost-shifting between ratepayers.
We also modeled policy scenarios to address utility revenue shortfalls and cost shifting to determine the financial impact on both solar and non-solar customers. The result was a clearer understanding of the financial risks associated with on-site solar investments in specific markets, as well as subsequent adjustments to PPA structures and underwriting policies.
