The sun is rising on dynamic tariffs

Dynamic pricing and distributed energy generation through rooftop solar, or “residential PV”, if you’re running out of character space – two key trends right now, right? They are actually deeply interconnected, both requiring large amounts of data disaggregation and intelligent insights to help consumers and utilities optimise energy usage, reduce costs, and improve grid stability. What you have in your home, or on your roof, very much matters when deciding which type of tariff you should be on, or not be on.

What is dynamic pricing?

Dynamic pricing refers to electricity tariffs that fluctuate based on market conditions, particularly the spot price of electricity. These changes can be hourly or even more frequent, allowing consumers to take advantage of lower prices when demand is low while avoiding high-cost periods. This pricing model plays a crucial role in enhancing grid efficiency, reducing peak loads, and promoting sustainable energy consumption.

The Importance of Real-Time Market Insights

One of the most significant challenges of dynamic pricing is ensuring that end users receive timely and accurate information about electricity prices. Real-time market insights provide a solution by enabling consumers to plan their energy usage efficiently.

For example, day-ahead electricity pricing data can be leveraged to notify consumers about optimal times to use energy-intensive appliances. This allows households and businesses to shift consumption to lower-cost periods, reducing overall energy expenses while also alleviating pressure on the grid.

Rooftop Solar and Dynamic Pricing, how insightful

With the increasing adoption of rooftop solar panels, more homes are becoming both producers and consumers of electricity. This shift presents new opportunities to optimise energy usage through dynamic pricing. Households with solar panels can take advantage of market insights to decide when to consume their self-generated electricity, when to store it, and when to export it back to the grid for maximum financial benefit.
However, to truly unlock the value of dynamic pricing and solar generation, households need granular energy data that allows them to make informed decisions. Simply knowing the spot price of electricity is not enough—users also need insights into their own consumption and production to fully optimise their energy use.

Enter, PV Disaggregation

One of the main challenges for solar-equipped homes is the lack of full consumption visibility. Many PV-equipped homes only have access to Import and Export data, which limits their ability to analyse their overall energy use. A key advancement in this area is PV Disaggregation, which leverages unique algorithms and machine learning to estimate both Consumption and Production data without requiring direct integration with the PV system.

This capability fills a critical gap, allowing solar-equipped consumers to:

• Gain insights into their full energy balance, including when they are consuming self-generated electricity versus drawing from the grid.
• Receive tailored recommendations on when to use stored solar energy or shift consumption to cheaper grid periods.
• Improve forecasting for energy needs, making it easier to select dynamic tariffs that align with their specific usage patterns.

Enhancing Consumer Engagement with Price Alerts

To make the most of dynamic pricing, consumers need proactive alerts that inform them of upcoming price changes. Notifications about high and low price periods ensure that users can make informed decisions about their energy usage.

Some key types of market price alerts include:

• Next day market price anomaly alerts: Notifying users of significant price spikes or negative prices.
• High and low peak price notifications: Helping consumers schedule energy usage around favorable price conditions.
• Daily electricity price summaries: Providing an at-a-glance overview of current and upcoming prices to aid decision-making.

When combined with PV Disaggregation, these alerts become even more powerful—allowing users to not only react to market prices but also to intelligently manage their self-generated solar power. For example, if electricity prices are expected to be low the next day, users might choose to store excess solar power in a battery for use at a later time when prices rise.

The Benefits for Utility Providers

For utility providers, dynamic pricing platforms offer an opportunity. Yes, really, this is not a headache, it’s a chance to become relevant again by driving energy efficiency and customer engagement. By integrating market insights with PV Disaggregation and dynamic tariff recommendations, utilities can:

• Encourage consumers to adopt more sustainable and cost-effective energy habits.
• Enhance grid stability by reducing peak loads through smarter energy usage patterns.
• Offer personalised tariffs that reflect each household’s actual energy production and consumption behavior.
• Keep their customers. 

As the energy landscape continues to look like a rollercoaster, dynamic pricing and distributed solar generation will play a leading role in the play that is all about ensuring cost-effective and sustainable energy consumption. The ability to provide users with accurate, timely, and actionable price insights—especially when integrated with solar production data—will be key to successfully implementing dynamic pricing models in the future.

By the Way, It’s the Law

The EU Electricity Directive (2019/944) requires consumers to have access to their energy consumption data. This is critical as dynamic pricing and solar energy become more widespread. With access to this data, consumers can make smarter energy decisions, aligning their usage with market conditions for potential savings. As the energy landscape evolves, complying with this law ensures that both consumers and utilities can make the most of dynamic pricing and solar energy opportunities.

If you want to learn more about what this could look like in real life, check out EMS and Entega!