Want to help your customers get the most out of their solar system? Use WattzOn’s Distance Score to quickly identify how your customers can take action to increase solar cash flows. The Distance Score shows exactly how much kWh usage should change, allowing solar companies to provide house-level coaching to improve solar system benefits. It’s a win for the solar customer, and also the solar company, leading to increased referrals from happy customers, and a higher solar system value and lower risk to financing partners.
WattzOn’s Distance Score is a simple, accurate number that shows how the home’s distance from that max savings peak. The Distance Score integrates utility rate schedules, financing terms, solar production, and electricity usage, and incorporates all the rate details over the utility billing cycle. Using a customer’s recent history of usage, the metric summarizes past behavior and can be used to coach new behaviors.
For example, Distance Scores values could be 14% (increase kWh usage over the month) or (-9%) (decrease kWh usage over the month). The Distance Score a great tool to use for long-term customer engagement.
“Hey Joe, Last June you used 1140 kWh with PG&E. Reduce your usage this June by 12% (140 kWh) to save an additional $25 from your solar system. Here are some great tips.” 1
WattzOn’s Distance Score provides a simple message to the consumer, and crunches a lot of math behind the scenes to provide an accurate personalized metric.---
- Q: How is the advice from a Distance Score different?
Everyone wants a lower utility bill. For homeowners without solar, the best advice is always: Use less energy. There are a lot of complicated rate structures out there, but the best answer is always reducing consumption.
The best answer for solar homes is different. Some homes should decrease electricity use and some should increase it. Electricity from the rooftop solar system has two prices, and this creates an optimal amount of usage, a peak of solar savings. If solar production is used at home, it saves the 15–20 cents per kWh that would have been spent at the utility. If solar production is not used at home and fed into the grid, the price paid by the utility is typically much lower, just 3–4 cents per kWh.
Each home has a peak savings point: the kWh usage that delivers the maximum cash benefit from the rooftop solar system. The Distance Score addresses both customer types, those that should decrease usage and those that need to increase usage to get the most out of their solar system.
- Q: When would the Distance Score suggest increased kWh usage?
A: When the rate schedule is tiered, and the homeowner’s usage has fallen to the lowest tiers. This might happen when a child leaves for college years after the solar system has been installed. Suppose the solar system will produce 1000 kWh during the billing month and the monthly lease payment is $180. This is an implied cost 18 cents per kWh produced. If the homeowner’s usage is in the lowest utility rate tiers, with an average cost of 17 cents per kWh, then the solar system loses $10 in the month2. If usage increases to higher tiers, and the average utility rate is raised to 22 cents per kWh, then the system could save
$40 per month3.
It may seem crazy to recommend increased energy use, but solar systems with negative cash flows have a high level of prepayment risk, eg higher likelihood of payoff at a home sale. Home buyers do not want a negative value system. They also don’t want to negotiate its value. This leads to early payoffs by home sellers and reduced return to solar investors. It makes sense for solar companies to encourage customers to move to the kWh usage that demonstrates the highest possible value of the solar system. Consider this as an upsell opportunity, such as free fuel for an electric vehicle.
- Q: What about Time-of-Use (TOU) Rates?
Distance Scores work well with Time of Use rates too. In the examples above, all the behind-the-scenes calculations are tied to the monthly billing cycle, where usage and production are netted out at the end of the month. With Time of Use rates the netting out happens within each rate block each day. The message to the consumer based on the Distance Score is then tailored and specific: “Maximize your solar savings by reducing your electricity use after 3pm by 25%. Increase your usage before 3pm by 15% so you can use more of your solar production. Here’s how.” However, we recommend partners stick to monthly messaging which is anchored to the utility bill payment, and avoid a confusing stream of hourly messages based on daily fluctuations.
The math of solar cash flows is complex, and quite a bit of data (utility rate schedules, financing terms, solar production, and electricity usage) must be integrated to produce a clear answer. In addition, all the data and calculations must be tailored to fit the utility billing cycle. The result is a customized Distance Score for each home and
And fair warning: Utility data is required, estimates don’t work.
About: WattzOn provides consumer-permissioned automated utility data streams that enable long-term customer engagement and lower the costs of solar financing. Our integrated analytics are based on advanced machine learning algorithms that extract and validate every detail of the utility bill: usage, complex rates, special charges and more. For more information, check out our thought leadership pieces on Trusted Solar Savings and Solar Risk Metrics.
1 $25 increase in cashflow: (140 kWh x 22 cents avoided utility expense) – (140 kWh x 4 cents feed-in payment)
2 (1000 kWh x (17 cents per kWh used – 18 cents per kWh avoided))
3 (1000 kWh x (22 cents per kWh used – 18 cents per kWh avoided))