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Impact of electricity market feedback on investments in solar photovoltaic and battery systems in Swedish single-family dwellings

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  • Goop, Joel
  • Nyholm, Emil
  • Odenberger, Mikael
  • Johnsson, Filip

Abstract

The profitability of investments in photovoltaics (PVs) and batteries in private households depends on the market price of electricity, which in turn is affected by the investments made in and the usage of PVs and batteries. This creates a feedback mechanism between the centralised electricity generation system, and household investments in PVs and batteries. To investigate this feedback effect, we connect a local optimisation model for household investments with a European power generation dispatch model. The local optimisation is based on the consumption profiles measured for 2104 Swedish households. The modelling compares three different scenarios for the centralised electricity supply system in Year 2032, as well as several sensitivity cases. Our results show total investment levels of 5–20 GWp of PV and 0.01–10 GWh of battery storage capacity in Swedish households in the investigated cases. These levels are up to 33% lower than before market feedback is taken into account. The profitability of PV investments is affected most by the price of electricity and the assumptions made regarding grid tariffs and taxes. The value of investments in batteries depends on both the benefits of increased self-consumption of PV electricity and market arbitrage.

Suggested Citation

  • Goop, Joel & Nyholm, Emil & Odenberger, Mikael & Johnsson, Filip, 2021. "Impact of electricity market feedback on investments in solar photovoltaic and battery systems in Swedish single-family dwellings," Renewable Energy, Elsevier, vol. 163(C), pages 1078-1091.
    • Handle: RePEc:eee:renene:v:163:y:2021:i:c:p:1078-1091
    DOI: 10.1016/j.renene.2020.06.153
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    2. Karimzadeh Kolamroudi, Mohammad & Ilkan, Mustafa & Egelioglu, Fuat & Safaei, Babak, 2022. "Maximization of the output power of low concentrating photovoltaic systems by the application of reflecting mirrors," Renewable Energy, Elsevier, vol. 189(C), pages 822-835.
    3. Yana Buravleva & Decai Tang & Brandon J. Bethel, 2021. "Incentivizing Innovation: The Causal Role of Government Subsidies on Lithium-Ion Battery Research and Development," Sustainability, MDPI, vol. 13(15), pages 1-16, July.
    4. Li, Fengyun & Zheng, Haofeng & Li, Xingmei, 2022. "A novel hybrid model for multi-step ahead photovoltaic power prediction based on conditional time series generative adversarial networks," Renewable Energy, Elsevier, vol. 199(C), pages 560-586.

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