Efficient Investments in Community Choice Aggregation through Stable Uniform Price Cost Sharing

Increasingly ubiquitous solar panels in residential buildings and the end of net metering programs make energy communities increasingly attractive for prosumers to reduce their electricity costs. In this context, cooperative game theory models have been proposed to find a mechanism to distribute collective cost savings among community members. We address here a shortcoming in a recently proposed mechanism to share savings through uniform price allocations stemming from shadow prices of a linear program. We show that in cases where existing local rooftop generation is sufficiently high, that mechanism may incentivize inefficient investments by under-compensated participants. We propose a modified mechanism in which investment decisions are part of the optimization problem and show that the desirable properties of game-theoretic stability and computational tractability are maintained, while incentivizing only efficient investments. We show theoretical results, illustrate the proposed model via examples and discuss remaining challenges for the approach.