This issue brief explores alternatives to address the inefficiencies and instability of the electricity grid caused by the growth of behind-the-meter (BTM) generators such as rooftop solar. Encouraging the demand side to operate and manage BTM generators has the benefit of lowering capital and management costs while increasing grid reliability. In California, the state's Net Energy Metering (NEM) 1.0 and 2.0 programs have enabled rapid deployment of rooftop solar, and the recent NEM 3.0 program is sending price signals to incentivize integrated installations with battery storage. In Korea, it is reasonable to induce an increase in the penetration of BTM generators through retail rate compensation levels such as California's NEM 1.0 or 2.0, but to take demand-side measures by establishing a compensation system that can send appropriate price signals to users of BTM generators to control volatility, such as the 3.0 system.
HIGHLIGHTS
• Behind-the-meter (BTM) generators, such as rooftop photovoltaic (PV), have the potential to reduce electricity bills for consumers and generation costs for grid operators, but they can also cause to grid inefficiencies and instability if operated not properly.
• With the expansion of BTM generators, while the installation of auxiliary devices by the grid operator can address the problem of grid instability, it may necessitate constant capital investment. In contrast, the demand-side operation and management of BTM generators not only enhance the stability of the distribution grid but also offer the advantage of reducing capital investment and management costs in the long term.
• California's Net Energy Metering (NEM) 1.0 and 2.0 allowed the State to rapidly increase the penetration of rooftop PV, and now with 3.0, it is using price signals to incentivize integrated installations with battery storage.
• In Korea, we believe that it would be reasonable to incentivize the deployment of BTM generators through retail rate compensation levels such as California's NEM 1.0 or 2.0, but to establish a compensation system that can send appropriate price signals such as NEM 3.0 so that BTM generator users can control volatility on their own.