Cost and Performance Analysis of Home Level Microgrids to Reduce Peak Time Overload

Managing the power during peak periods poses a challenge to power companies. During peak time, the drastic uptick in consumption causes exponential increases in the power losses which has a direct effect on the overall power cost. In addition, these drastic increases in demand can make the grid unstable. Recently, power companies such as Alabama Power have introduced a dynamic (or time of use) pricing scale to encourage consumers to shift their loads to the off-peak time. Instead of charging a flat rate, Alabama Power charges the consumers depending on when the power is consumed. Using power during peak time will result in a higher price compared to the off-peak time. During summer months, this price increase can be over three times that of off-peak times. If a consumer can find ways to exploit this dynamic pricing (I.E., don’t use electricity during peak times), the consumer will have a significantly lower electric bill and the electric company will have less line losses and improved grid stability. The research in this paper focuses on developing and testing a microgrid system. The microgrid is expected to give the customer more freedom to use the power at low cost and to reduce the power losses for power companies. In addition, cost analysis based on the dynamic rate is performed to study the feasibility of the proposed system.