IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v189y2024ipbs1364032123008225.html
   My bibliography  Save this article

Techno-economic impact of electricity price mechanism and demand response on residential rooftop photovoltaic integration

Author

Listed:
  • Cai, Qiran
  • Qing, Jing
  • Xu, Qingyang
  • Shi, Gang
  • Liang, Qiao-Mei

Abstract

Rooftop distributed photovoltaics show great potential for deep decarbonisation in the residential sector. However, the intermittency and undispatchability of photovoltaic output are urgent problems in the large-scale deployment of rooftop distributed photovoltaics. This study develops a techno-economic evaluation framework for rooftop distributed photovoltaics by comprehensively considering and exploring the uncertain effects of electricity price mechanisms, battery energy storage, demand response for residential flexible loads, and residential electricity demand difference to increase self-consumption and the economic benefits of rooftop distributed photovoltaics. The results show that electricity price mechanisms are the main factors affecting the economic benefits of rooftop distributed photovoltaics, which are more economical under time-of-use prices than under flat prices. Installing battery energy storage and participating in demand response for residential flexible loads can significantly improve self-consumption and self-sufficiency rates, and bring more electricity bill savings and less feed-in revenue. Specifically, the relative economic benefits of installing battery energy storage and demand response were greater at lower feed-in tariffs. Moreover, the greater the ratio of annual residential electricity demand to photovoltaic power generation, the greater the self-consumption rate. Further, only when battery energy storage is installed, the smaller the ratio, the greater the self-sufficiency rate. Consequently, the energy sector can design more efficient time-of-use pricing mechanisms and adopt lower feed-in tariffs to encourage residential consumers to deploy both rooftop distributed photovoltaics and battery energy storage and to participate in demand response.

Suggested Citation

  • Cai, Qiran & Qing, Jing & Xu, Qingyang & Shi, Gang & Liang, Qiao-Mei, 2024. "Techno-economic impact of electricity price mechanism and demand response on residential rooftop photovoltaic integration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).
    • Handle: RePEc:eee:rensus:v:189:y:2024:i:pb:s1364032123008225
    DOI: 10.1016/j.rser.2023.113964
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032123008225
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2023.113964?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zakeri, Behnam & Cross, Samuel & Dodds, Paul.E. & Gissey, Giorgio Castagneto, 2021. "Policy options for enhancing economic profitability of residential solar photovoltaic with battery energy storage," Applied Energy, Elsevier, vol. 290(C).
    2. Geoffrey G. Parker & Burcu Tan & Osman Kazan, 2019. "Electric Power Industry: Operational and Public Policy Challenges and Opportunities," Production and Operations Management, Production and Operations Management Society, vol. 28(11), pages 2738-2777, November.
    3. Pallonetto, Fabiano & De Rosa, Mattia & D’Ettorre, Francesco & Finn, Donal P., 2020. "On the assessment and control optimisation of demand response programs in residential buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    4. Micha T. Kahlen & Wolfgang Ketter & Jan van Dalen, 2018. "Electric Vehicle Virtual Power Plant Dilemma: Grid Balancing Versus Customer Mobility," Production and Operations Management, Production and Operations Management Society, vol. 27(11), pages 2054-2070, November.
    5. Li, Yanxue & Zhang, Xiaoyi & Gao, Weijun & Ruan, Yingjun, 2020. "Capacity credit and market value analysis of photovoltaic integration considering grid flexibility requirements," Renewable Energy, Elsevier, vol. 159(C), pages 908-919.
    6. Aghajani, G.R. & Shayanfar, H.A. & Shayeghi, H., 2017. "Demand side management in a smart micro-grid in the presence of renewable generation and demand response," Energy, Elsevier, vol. 126(C), pages 622-637.
    7. Javadi, Mohammad Sadegh & Gough, Matthew & Lotfi, Mohamed & Esmaeel Nezhad, Ali & Santos, Sérgio F. & Catalão, João P.S., 2020. "Optimal self-scheduling of home energy management system in the presence of photovoltaic power generation and batteries," Energy, Elsevier, vol. 210(C).
    8. Tervo, Eric & Agbim, Kenechi & DeAngelis, Freddy & Hernandez, Jeffrey & Kim, Hye Kyung & Odukomaiya, Adewale, 2018. "An economic analysis of residential photovoltaic systems with lithium ion battery storage in the United States," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 1057-1066.
    9. Kenneth T. Gillingham & Bryan Bollinger, 2021. "Social Learning and Solar Photovoltaic Adoption," Management Science, INFORMS, vol. 67(11), pages 7091-7112, November.
    10. Dietrich, Andreas & Weber, Christoph, 2018. "What drives profitability of grid-connected residential PV storage systems? A closer look with focus on Germany," Energy Economics, Elsevier, vol. 74(C), pages 399-416.
    11. Lu, Qing & Yu, Hao & Zhao, Kangli & Leng, Yajun & Hou, Jianchao & Xie, Pinjie, 2019. "Residential demand response considering distributed PV consumption: A model based on China's PV policy," Energy, Elsevier, vol. 172(C), pages 443-456.
    12. Henni, Sarah & Staudt, Philipp & Weinhardt, Christof, 2021. "A sharing economy for residential communities with PV-coupled battery storage: Benefits, pricing and participant matching," Applied Energy, Elsevier, vol. 301(C).
    13. Li, Yanxue & Zhang, Xiaoyi & Gao, Weijun & Xu, Wenya & Wang, Zixuan, 2022. "Operational performance and grid-support assessment of distributed flexibility practices among residential prosumers under high PV penetration," Energy, Elsevier, vol. 238(PB).
    14. Sheha, Moataz & Mohammadi, Kasra & Powell, Kody, 2021. "Techno-economic analysis of the impact of dynamic electricity prices on solar penetration in a smart grid environment with distributed energy storage," Applied Energy, Elsevier, vol. 282(PA).
    15. Koskela, Juha & Rautiainen, Antti & Järventausta, Pertti, 2019. "Using electrical energy storage in residential buildings – Sizing of battery and photovoltaic panels based on electricity cost optimization," Applied Energy, Elsevier, vol. 239(C), pages 1175-1189.
    16. Mulleriyawage, U.G.K. & Shen, W.X., 2021. "Impact of demand side management on optimal sizing of residential battery energy storage system," Renewable Energy, Elsevier, vol. 172(C), pages 1250-1266.
    17. Cristea, Ciprian & Cristea, Maria & Birou, Iulian & Tîrnovan, Radu-Adrian, 2020. "Economic assessment of grid-connected residential solar photovoltaic systems introduced under Romania’s new regulation," Renewable Energy, Elsevier, vol. 162(C), pages 13-29.
    18. Darghouth, Naïm R. & Wiser, Ryan H. & Barbose, Galen & Mills, Andrew D., 2016. "Net metering and market feedback loops: Exploring the impact of retail rate design on distributed PV deployment," Applied Energy, Elsevier, vol. 162(C), pages 713-722.
    19. Feng, Wei & Zhang, Qianning & Ji, Hui & Wang, Ran & Zhou, Nan & Ye, Qing & Hao, Bin & Li, Yutong & Luo, Duo & Lau, Stephen Siu Yu, 2019. "A review of net zero energy buildings in hot and humid climates: Experience learned from 34 case study buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    20. Mulleriyawage, U.G.K. & Wang, P. & Rui, T. & Zhang, K. & Hu, C. & Shen, W.X., 2023. "Prosumer-centric demand side management for minimizing electricity bills in a DC residential PV-battery system: An Australian household case study," Renewable Energy, Elsevier, vol. 205(C), pages 800-812.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santiago, Isabel & Palacios-Garcia, Emilio J. & Gonzalez-Redondo, Miguel & Arenas-Ramos, Victoria & Simon, Bernardo & Hayes, Barry P. & Moreno-Munoz, Antonio, 2024. "Assessment of generation capacity and economic viability of photovoltaic systems on urban buildings in southern Spain: A socioeconomic, technological, and regulatory analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 203(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cai, Qiran & Xu, Qingyang & Qing, Jing & Shi, Gang & Liang, Qiao-Mei, 2022. "Promoting wind and photovoltaics renewable energy integration through demand response: Dynamic pricing mechanism design and economic analysis for smart residential communities," Energy, Elsevier, vol. 261(PB).
    2. Claudia Gunther & Wolf-Peter Schill & Alexander Zerrahn, 2019. "Prosumage of solar electricity: tariff design, capacity investments, and power system effects," Papers 1907.09855, arXiv.org.
    3. Günther, Claudia & Schill, Wolf-Peter & Zerrahn, Alexander, 2021. "Prosumage of solar electricity: Tariff design, capacity investments, and power sector effects," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 152.
    4. Nina Munzke & Felix Büchle & Anna Smith & Marc Hiller, 2021. "Influence of Efficiency, Aging and Charging Strategy on the Economic Viability and Dimensioning of Photovoltaic Home Storage Systems," Energies, MDPI, vol. 14(22), pages 1-46, November.
    5. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "The impact of a subsidized tax deduction on residential solar photovoltaic-battery energy storage systems," Utilities Policy, Elsevier, vol. 75(C).
    6. Elkholy, M.H. & Senjyu, Tomonobu & Elymany, Mahmoud & Gamil, Mahmoud M. & Talaat, M. & Masrur, Hasan & Ueda, Soichiro & Lotfy, Mohammed Elsayed, 2024. "Optimal resilient operation and sustainable power management within an autonomous residential microgrid using African vultures optimization algorithm," Renewable Energy, Elsevier, vol. 224(C).
    7. Nikolas G. Chatzigeorgiou & Spyros Theocharides & George Makrides & George E. Georghiou, 2023. "Evaluating the Techno-Economic Effect of Pricing and Consumption Parameters on the Power-to-Energy Ratio for Sizing Photovoltaic-Battery Systems: An Assessment of Prosumers in the Mediterranean Area," Energies, MDPI, vol. 16(10), pages 1-27, May.
    8. Andreolli, Francesca & D’Alpaos, Chiara & Moretto, Michele, 2022. "Valuing investments in domestic PV-Battery Systems under uncertainty," Energy Economics, Elsevier, vol. 106(C).
    9. Jiao, P.H. & Chen, J.J. & Cai, X. & Wang, L.L. & Zhao, Y.L. & Zhang, X.H. & Chen, W.G., 2021. "Joint active and reactive for allocation of renewable energy and energy storage under uncertain coupling," Applied Energy, Elsevier, vol. 302(C).
    10. Fernando Echevarría Camarero & Ana Ogando-Martínez & Pablo Durán Gómez & Pablo Carrasco Ortega, 2022. "Profitability of Batteries in Photovoltaic Systems for Small Industrial Consumers in Spain under Current Regulatory Framework and Energy Prices," Energies, MDPI, vol. 16(1), pages 1-19, December.
    11. Wu, Zhuochun & Kang, Jidong & Mosteiro-Romero, Martín & Bartolini, Andrea & Ng, Tsan Sheng & Su, Bin, 2024. "A distributionally robust optimization model for building-integrated photovoltaic system expansion planning under demand and irradiance uncertainties," Applied Energy, Elsevier, vol. 372(C).
    12. Nicola Blasuttigh & Simone Negri & Alessandro Massi Pavan & Enrico Tironi, 2023. "Optimal Sizing and Environ-Economic Analysis of PV-BESS Systems for Jointly Acting Renewable Self-Consumers," Energies, MDPI, vol. 16(3), pages 1-25, January.
    13. Gust, Gunther & Schlüter, Alexander & Feuerriegel, Stefan & Úbeda, Ignacio & Lee, Jonathan T. & Neumann, Dirk, 2024. "Designing electricity distribution networks: The impact of demand coincidence," European Journal of Operational Research, Elsevier, vol. 315(1), pages 271-288.
    14. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2021. "Rate design with distributed energy resources and electric vehicles: A Californian case study," Energy Economics, Elsevier, vol. 102(C).
    15. Frank Fiedler & Joaquin Coll Matas, 2022. "Techno-Economic Analysis of Grid-Connected PV Battery Solutions for Holiday Homes in Sweden," Energies, MDPI, vol. 15(8), pages 1-21, April.
    16. Lu-Miao Li, Peng Zhou, and Wen Wen, 2023. "Distributed Renewable Energy Investment: The Effect of Time-of-Use Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 5).
    17. Olivier Rebenaque, 2020. "An economic assessment of the residential PV self-consumption support under different network tariffs," Working Papers 2001, Chaire Economie du climat.
    18. Tang, Songlin & Zhou, Wenbing & Li, Xinjin & Chen, Yingchao & Zhang, Qian & Zhang, Xiliang, 2021. "Subsidy strategy for distributed photovoltaics: A combined view of cost change and economic development," Energy Economics, Elsevier, vol. 97(C).
    19. Qiu, Yueming (Lucy) & Wang, Yi David & Xing, Bo, 2021. "Grid impact of non-residential distributed solar energy and reduced air emissions: Empirical evidence from individual-consumer-level smart meter data," Applied Energy, Elsevier, vol. 290(C).
    20. Kanakadhurga, Dharmaraj & Prabaharan, Natarajan, 2022. "Demand side management in microgrid: A critical review of key issues and recent trends," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:189:y:2024:i:pb:s1364032123008225. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.