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vLink=blue>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>Wrenches,</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>I agree with Joel.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT
color=#000000></FONT></SPAN> </DIV></FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>This is my policy on the matter: Consider any Demand
Charge reductions to be bonuses in favor of the customer. I think it is OK to
say that there MAY be some savings, but DO NOT try to guarantee or
insinuate that there WILL be any Demand related savings. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>Here's why: UNLESS you have multi-year interval
data for the site... AND the ability to accurately interpret it....
AND the facility has a favorable tariff... </FONT></SPAN><SPAN
class=250565716-19032010><FONT color=#0000ff size=2 face=Arial>AND a site
with a <STRONG><U>very</U></STRONG> predictable load <EM>(think in terms of
being able to predict the 15-minute interval which will set the Demand Charge
within +/- 1 hour).</EM>.. AND the 15-minute period which would otherwise set
the Demand Charge coincides with a period when the PV system is operating at a
predictable output.... AND your overlay of predicted generation on top of
predicted load indicates a FANTASTIC Demand reduction... AND your proposed
system has multiple inverters <EM>(the more the merrier here)...</EM> AND the
weather is reliably predictable around the 1-hour period you predict the "new"
Peak Demand to occur... Don't bother having the conversation or spending
otherwise productive time analyzing the matter... </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>If all the the ANDs above are true and you really want to
go thru the exercise, for whatever reasons you may have, be sure to consider the
following: In order to "prove" whether or not there was an effect on the Demand
Charges due to the PV system after the fact, you will need to have interval
data for both the generation and the facility. You will need to be able to
evaluate whether or not the customer's load profile, independent of the
PV, changed from the predicted values and, if it did, what the reasons for
that were. For example, if they increase or decrease their loads independent of
the PV, the net change is due to the customer's actions and the PV. Once you
have determined these factors, then you can begin to </FONT></SPAN><SPAN
class=250565716-19032010><FONT color=#0000ff size=2 face=Arial>calculate the
effective "value" of the PV was on a Demand Charge
basis.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>It is possible and, in fact, likely that the PV will have some
positive effect on the Demand Charges for a given facility. It is, however, very
difficult to predict what that will be unless all of the ANDs noted above are
true. One of the keys driving the final calculation is the ratio of the PV
system's power rating to the customer's load coincident to the 15-minute
interval when the Demand Charges are set. The larger the system
is, compared to the facility load, the more likely and greater the savings
will be. Embedded in this relationship are the seasonal and hourly load profiles
of the facility, the reliability of the weather during this period, and how
closely they line up with the production profile. If you are intending to
"guarantee" some number of kW reduction, be sure you have multiple inverters on
the project. The more inverters you have, the more confidence you can have in
your predictions. </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>Over the years, I've spent plenty of brain-damaging hours
<EM>(weeks & weeks)</EM> working on this. For utility
companies, large integrators, and small integrators. Before and after
installation. With and without complex load and generation profile data. On
facilities with loads of all magnitudes and hourly/seasonal profiles. The end
result is the same... The effective Demand Charge savings due strictly to the
PV is relatively small and terribly difficult to predict from year to year.
I've had to analyze and report on "why" the mucky-muck MBA &
Engineers' predictions were so far off from the actual experience after the
projects went in. In the minds of these folks, it seems like a no-brainer and
just another column in their spreadsheets during the sales cycle. It's a lot
more complicated than that. </FONT></SPAN><SPAN class=250565716-19032010><FONT
color=#0000ff size=2 face=Arial>I know of several institutional customers who
bought into paying the integrator for these Demand savings on
projects and have walked away from doing it on future projects. The
ones who have bought into paying for projected future Demand reductions in the
up-front cost of the project have regretted it. </FONT></SPAN><SPAN
class=250565716-19032010><FONT color=#0000ff size=2 face=Arial>The ones who have
agreed to pay for it as a line-item on a PPA bill, aren't doing it in the
future. It's simply too much brain-damage. Too complex. If they are going to
have to pay somebody for it, it's a lot easier to pay the utility
company.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>I've had to analyze and report on cases where the facility
Demand Charges have increased after installation of PV systems. After you
isolate the load and generation factors, and demonstrate that the
customer's load profile has changed from the historical <EM>(generally
larger loads later in the day when the PV can't help as much)</EM>, you can do
the dance of trying to show them that they avoided something and trying to
quantify exactly what that is/was. A lot of Demand tariffs actually punish lower
kWh consumption, so you have to factor that negative impact into the value
analysis. </FONT></SPAN><SPAN class=250565716-19032010><FONT color=#0000ff
size=2 face=Arial>A LOT of time goes into this when you consider all the
communication, data gathering, analyisis, presentation, and negotiation.
Remember, it only takes one 15-minute period that occurs outside of your
effective generation curve to blow the whole theoretical thing
up.</FONT></SPAN></DIV>
<DIV><FONT color=#0000ff size=2 face=Arial></FONT> </DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN class=250565716-19032010>IF you
are set on going thru the exercise with the intent of predicting/promising
something, you need a facility with a very stable load profile that occurs
during peak PV periods, stable utility voltage, </SPAN></FONT><FONT
color=#0000ff size=2 face=Arial><SPAN class=250565716-19032010>a tariff that
doesn't punish lower consumption, reliably predictable & favorable weather
coincident with facility peak demand, a large PV to Load ratio (>50%), and
multiple inverters. The combination of requisite weather, PV:Load ratio, and
favorable tariff pretty much makes the number of facilites, which you can model
accurately, very small.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN
class=250565716-19032010></SPAN></FONT> </DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN class=250565716-19032010>I
recommend going to the beach or mountains instead.</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff size=2 face=Arial></FONT> </DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN
class=250565716-19032010>$0.02001</SPAN></FONT></DIV>
<DIV><FONT color=#0000ff size=2 face=Arial><SPAN class=250565716-19032010>Solar
Janitor</SPAN></FONT></DIV><BR>
<DIV dir=ltr lang=en-us class=OutlookMessageHeader align=left>
<HR tabIndex=-1>
<FONT size=2 face=Tahoma><B>From:</B> Joel Davidson<BR><B>Sent:</B>
Thursday, March 18, 2010 7:47 PM<BR><B>To:</B> RE-wrenches<BR><B>Subject:</B>
Re: [RE-wrenches] Demand Charge Reduction by PV<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV><FONT size=2 face=Arial>Hello Peter,</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>I have seen 40% to 70% monthly demand charge
reduction for some southern California PV projects for some months, but it is
still a crap shoot. 15 minutes and 1 second of clouds during the peak demand
period will trump a client's energy management efforts unless
they are willing and able to shed loads during cloudy periods. I tell
clients that they cannot rely on the weather to cooperate, to monitor and
control their demand, and to think of any PV savings on their monthly
demand charge as a windfall.</FONT></DIV>
<DIV><FONT size=2 face=Arial></FONT> </DIV>
<DIV><FONT size=2 face=Arial>Joel Davidson</FONT></DIV>
<DIV> </DIV>
<DIV>----- Original Message ----- </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px">
<DIV
style="FONT: 10pt arial; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=peter.parrish@calsolareng.com
href="mailto:peter.parrish@calsolareng.com">Peter Parrish</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A
title=re-wrenches@lists.re-wrenches.org
href="mailto:re-wrenches@lists.re-wrenches.org">'RE-wrenches'</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Thursday, March 18, 2010 9:38
AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [RE-wrenches] Demand Charge
Reduction by PV</DIV>
<DIV><BR></DIV>
<DIV class=Section1>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">I failed to clean up
the subject line on this post a few minutes ago. Please respond to this post
so that we can keep track of the topic properly.</SPAN></FONT><FONT size=2
face=Arial><SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt"><o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Esteemed
wrenches,<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">I have been wrestling
with this concept about as long as we have been in business. How to estimate
how much a <SPAN class=SpellE>pv</SPAN> system will reduce the demand charge
for a customer.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">I know the “worst
case” goes as follows: <o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(1)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Demand is based on
measuring the consumption every 15 minutes and keeping track of those numbers
for the entire billing period.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(2)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">The
customer gets socked with a demand charge that is based on the highest 15
minute consumption for the entire billing period.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(3)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">The
customer also gets soaked with a “facilities charge” that is equal to the
greatest monthly demand number for the trailing 12
months.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(4)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">Now
you have a solar system pumping out <SPAN class=SpellE>Wac</SPAN> varying over
the familiar bell-shaped curve during the day.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(5)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">In
the southwest US, peak demand typically occurs early in the afternoon in the
summer, during the week. Our LADWP has a mantra that goes something like this,
“Peak demand occurs at 3pm PDT on the third Thursday in August!” I believe
them.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(6)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">So
one would expect something like 40% of the peak <SPAN class=SpellE>Wac</SPAN>
to offset the peak demand, but what happened if the sun goes behind a cloud
for those 15 minutes? Answer, “Bad luck. Your demand is back to what it was
before you bought your solar system.<o:p></o:p></SPAN></FONT></P>
<P
style="TEXT-INDENT: -0.25in; MARGIN-LEFT: 0.5in; tab-stops: list .5in; mso-list: l3 level1 lfo5"
class=MsoNormal><![if !supportLists]><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-fareast-font-family: Arial"><SPAN
style="mso-list: Ignore">(7)<FONT size=1 face="Times New Roman"><SPAN
style="FONT: 7pt 'Times New Roman'">
</SPAN></FONT></SPAN></SPAN></FONT><![endif]><FONT color=navy size=2
face=Arial><SPAN style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">It
is actually worse than that. Peak demand recurs with approximately with the
same value with some regularity for an extended period of time, so the sun
will have to shine with full intensity every day when peak demand is expected
to occur, which in LA could be every day (M-F) of the 30 day billing
period.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">I have always taken
the position that we can’t guarantee that any of the demand charge will be
reduced with a solar system. But what do other PV integrators tell there
customers? Better yet is there any actual data on demand reduction with PV
systems? It seems to me that occasionally the monthly peak demand will in fact
be shaved by PV production, the question is how often in
practice?<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt">I once thought of
taking actual insolation data and comparing it with actual demand data and
doing a <st1:place w:st="on">Monte Carlo</st1:place> simulation (throwing the
dice = randomly matching up demand data with solar production data) – but I
haven’t retired yet.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt"><o:p> </o:p></SPAN></FONT></P>
<DIV>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-no-proof: yes"><!--[if gte vml 1]><v:shape
id="_x0000_s1026" style='position:absolute;margin-left:0;margin-top:0;width:50pt;
height:50pt;z-index:1;visibility:hidden' coordsize="21600,21600" o:spt="100"
o:preferrelative="t" adj="0,,0" path="" filled="f">
<v:stroke joinstyle="miter" />
<v:formulas/>
<v:path o:extrusionok="f" gradientshapeok="t" o:connecttype="rect" />
<o:lock v:ext="edit" aspectratio="t" selection="t" />
</v:shape><![endif]-->I would love to hear what others are doing about
this.<o:p></o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-no-proof: yes"><o:p> </o:p></SPAN></FONT></P>
<P class=MsoNormal><FONT color=navy size=2 face=Arial><SPAN
style="FONT-FAMILY: Arial; COLOR: navy; FONT-SIZE: 10pt; mso-no-proof: yes">-
Peter<o:p></o:p></SPAN></FONT></P>
<P><FONT color=navy size=2 face=Arial><SPAN
style="FONT-SIZE: 10pt; mso-bidi-font-family: Arial; mso-no-proof: yes">Peter
T. Parrish, Ph.D., President<BR><st1:place w:st="on"><st1:State
w:st="on">California</st1:State></st1:place> Solar Engineering,
Inc.<BR><st1:address w:st="on"><st1:Street w:st="on">820 Cynthia
Ave.</st1:Street>, <st1:City w:st="on">Los Angeles</st1:City>, <st1:State
w:st="on">CA</st1:State> <st1:PostalCode
w:st="on">90065</st1:PostalCode></st1:address><BR>CA Lic. 854779, NABCEP Cert.
031806-26<BR><A
href="mailto:peter.parrish@calsolareng.com">peter.parrish@calsolareng.com</A><SPAN
style="mso-spacerun: yes"> </SPAN><BR>Ph 323-258-8883, <st1:place
w:st="on"><st1:City w:st="on">Mobile</st1:City></st1:place> 323-839-6108, Fax
323-258-8885<SPAN
style="mso-spacerun: yes">
</SPAN><SPAN
style="mso-spacerun: yes"> </SPAN><o:p></o:p></SPAN></FONT></P></DIV></DIV></BLOCKQUOTE></BODY></HTML>