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The rapid growth of the behind-the-meter (BTM) distributed generation has ledto initiatives to reform the net energy metering (NEM) policies to addresspressing concerns of rising electricity bills, fairness of cost allocation, andthe long-term growth of distributed energy resources. This article presents ananalytical framework for the optimal prosumer consumption decision using aninclusive NEM X tariff model that covers existing and proposed NEM tariffdesigns. The structure of the optimal consumption policy lends itself to nearclosed-form optimal solutions suitable for practical energy management systemsthat are responsive to stochastic BTM generation and dynamic pricing. The shortand long-run performance of NEM and feed-in tariffs (FiT) are considered undera sequential rate-setting decision process. Also presented are numericalresults that characterize social welfare distributions, cross-subsidies, andlong-run solar adoption performance for selected NEM and FiT policy designs.

Integrating Distributed Energy Resources: Optimal Prosumer Decisions and Impacts of Net Metering Tariffs