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Prosumers: Grid vs. individual storage

Author

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  • Bravo-Melgarejo, Sai
  • Haritchabalet, Carole

Abstract

We present a stylized microeconomic model to analyze solar panels and storage investment decisions of a representative consumer under either grid (credit regulation) or individual (price regulation) storage. We identify the conditions under which prosumers become storers. We show that solar technology must be more competitive under credit than price regulation for consumers to invest in storage. We calibrate our model using French data from 2023 and 2030 and consider batteries and fuel-cells as potential individual storage technologies. France’s current price regulation incentivizes investment in solar capacity, but not in storage. Conversely, credit regulation would immediately encourage energy storage. Looking ahead to 2030, both regulatory frameworks would incentivize energy storage. The distribution system operator prefers credit regulation, provided the regulator allows full energy recovery. Overall, energy storage enhances welfare under both regulatory frameworks.

Suggested Citation

  • Bravo-Melgarejo, Sai & Haritchabalet, Carole, 2025. "Prosumers: Grid vs. individual storage," Energy Economics, Elsevier, vol. 141(C).
    • Handle: RePEc:eee:eneeco:v:141:y:2025:i:c:s0140988324008041
    DOI: 10.1016/j.eneco.2024.108095
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    More about this item

    Keywords

    Renewable energy; Storage; Decentralized production; Batteries; Hydrogen;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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