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Article
Cost-Reflective Dynamic Electricity Pricing for Prosumers
Electricity Journal
  • Mahelet G. Fikru, Missouri University of Science and Technology
  • Jeorge Atherton
  • Casey I. Canfield, Missouri University of Science and Technology
Abstract

Despite broad interest in dynamic electricity prices, few studies examine their effect on electricity bills and potential price signals for solar adoption. We develop a framework for dynamic prices based on marginal and average cost principles and examine their impact on prosumers' electricity bills. Results reveal that for prosumers the percent of onsite solar consumption determines the relationship between average and marginal costs. Applying the model on a sample of 18 solar houses shows that prosumer monthly bill savings are higher (1) during months of higher onsite solar consumption and (2) when dynamic prices are based on the marginal cost principle.

Department(s)
Economics
Second Department
Engineering Management and Systems Engineering
Keywords and Phrases
  • Average Cost,
  • Electric Rate Design,
  • Electricity Bill Savings,
  • Marginal Cost,
  • Photovoltaic
Document Type
Article - Journal
Document Version
Citation
File Type
text
Language(s)
English
Rights
© 2022 Elsevier, All rights reserved.
Publication Date
1-1-2022
Publication Date
January-February 2022
Citation Information
Mahelet G. Fikru, Jeorge Atherton and Casey I. Canfield. "Cost-Reflective Dynamic Electricity Pricing for Prosumers" Electricity Journal Vol. 35 Iss. 1 (2022) ISSN: 1040-6190
Available at: http://works.bepress.com/casey-canfield/28/