IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i23p10432-d1532014.html
   My bibliography  Save this article

Techno-Economic Factors Impacting the Intrinsic Value of Behind-the-Meter Distributed Storage

Author

Listed:
  • Ingrid Hopley

    (School of Engineering, Edith Cowan University, Joondalup, WA 6027, Australia)

  • Mehrdad Ghahramani

    (School of Engineering, Edith Cowan University, Joondalup, WA 6027, Australia)

  • Asma Aziz

    (School of Engineering, Edith Cowan University, Joondalup, WA 6027, Australia)

Abstract

With the increasing adoption of renewable energy, there is a growing need for efficient storage solutions. Battery storage is becoming an essential tool for maintaining grid reliability and handling the variable nature of renewable energy sources. This research focuses on behind-the-meter, grid-connected household systems in Western Australia, adopting a consumer perspective to evaluate the financial viability of residential batteries. Using the HOMER Grid for techno-economic modeling, eight factors influencing financial viability were analyzed, with results validated through two external case studies. The findings suggest that photovoltaic (PV) systems paired with batteries can be cost-effective at current prices, depending on load profiles, tariffs, and grid sale limits. However, many factors lie outside the consumer’s control, contributing to significant financial uncertainty and limiting widespread battery adoption. Eliminating flat tariffs could make PV + Battery systems financially viable, although this may negatively affect other consumers on the grid. Even with a 30% reduction in battery price, PV-only systems remain optimal for many households. This study concludes that addressing and reducing consumer uncertainty is essential for encouraging the wider adoption of residential battery storage systems. At the same time, non-financial motivations such as energy independence or environmental concerns may drive early adopters in the interim.

Suggested Citation

  • Ingrid Hopley & Mehrdad Ghahramani & Asma Aziz, 2024. "Techno-Economic Factors Impacting the Intrinsic Value of Behind-the-Meter Distributed Storage," Sustainability, MDPI, vol. 16(23), pages 1-26, November.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:23:p:10432-:d:1532014
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/23/10432/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/23/10432/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hamid Soleimani & Daryoush Habibi & Mehrdad Ghahramani & Asma Aziz, 2024. "Strengthening Power Systems for Net Zero: A Review of the Role of Synchronous Condensers and Emerging Challenges," Energies, MDPI, vol. 17(13), pages 1-23, July.
    2. Esplin, Ryan & Nelson, Tim, 2022. "Redirecting solar feed in tariffs to residential battery storage: Would it be worth it?," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 373-389.
    3. Marion R. Dam & Marten D. van der Laan, 2024. "Techno-Economic Assessment of Battery Systems for PV-Equipped Households with Dynamic Contracts: A Case Study of The Netherlands," Energies, MDPI, vol. 17(12), pages 1-24, June.
    4. Ratnam, Elizabeth L. & Weller, Steven R. & Kellett, Christopher M., 2015. "An optimization-based approach to scheduling residential battery storage with solar PV: Assessing customer benefit," Renewable Energy, Elsevier, vol. 75(C), pages 123-134.
    5. Wilkinson, Sam & Maticka, Martin J. & Liu, Yue & John, Michele, 2021. "The duck curve in a drying pond: The impact of rooftop PV on the Western Australian electricity market transition," Utilities Policy, Elsevier, vol. 71(C).
    6. Soheil Mohseni & Jay Rutovitz & Heather Smith & Scott Dwyer & Farzan Tahir, 2023. "Economic Viability Assessment of Neighbourhood versus Residential Batteries: Insights from an Australian Case Study," Sustainability, MDPI, vol. 15(23), pages 1-27, November.
    7. Nicholls, A. & Sharma, R. & Saha, T.K., 2015. "Financial and environmental analysis of rooftop photovoltaic installations with battery storage in Australia," Applied Energy, Elsevier, vol. 159(C), pages 252-264.
    8. Say, Kelvin & John, Michele & Dargaville, Roger, 2019. "Power to the people: Evolutionary market pressures from residential PV battery investments in Australia," Energy Policy, Elsevier, vol. 134(C).
    9. Heidi S. Nygård & Stig Ødegaard Ottesen & Olav Henrik Skonnord, 2024. "Profitability Analyses for Residential Battery Investments: A Norwegian Case Study," Energies, MDPI, vol. 17(16), pages 1-18, August.
    10. Giovanni Brumana & Elisa Ghirardi & Giuseppe Franchini, 2024. "Comparison of Different Power Generation Mixes for High Penetration of Renewables," Sustainability, MDPI, vol. 16(19), pages 1-16, September.
    11. Zhou, Jian & Tsianikas, Stamatis & Birnie, Dunbar P. & Coit, David W., 2019. "Economic and resilience benefit analysis of incorporating battery storage to photovoltaic array generation," Renewable Energy, Elsevier, vol. 135(C), pages 652-662.
    12. Behnaz Behi & Philip Jennings & Ali Arefi & Ali Azizivahed & Almantas Pivrikas & S. M. Muyeen & Arian Gorjy, 2023. "A Robust Participation in the Load Following Ancillary Service and Energy Markets for a Virtual Power Plant in Western Australia," Energies, MDPI, vol. 16(7), pages 1-20, March.
    13. Huang, Lei & Sun, Wei & Li, Qiyue & Li, Weitao, 2023. "Distributed real-time economic dispatch for islanded microgrids with dynamic power demand," Applied Energy, Elsevier, vol. 342(C).
    14. Barbour, Edward & González, Marta C., 2018. "Projecting battery adoption in the prosumer era," Applied Energy, Elsevier, vol. 215(C), pages 356-370.
    15. Natapon Wanapinit & Nils Offermann & Connor Thelen & Christoph Kost & Christian Rehtanz, 2024. "Operative Benefits of Residential Battery Storage for Decarbonizing Energy Systems: A German Case Study," Energies, MDPI, vol. 17(10), pages 1-21, May.
    16. O. Y. Edelenbosch & A. F. Hof & B. Nykvist & B. Girod & D. P. Vuuren, 2018. "Transport electrification: the effect of recent battery cost reduction on future emission scenarios," Climatic Change, Springer, vol. 151(2), pages 95-108, November.
    Full references (including those not matched with items on IDEAS)

    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. Azuatalam, Donald & Paridari, Kaveh & Ma, Yiju & Förstl, Markus & Chapman, Archie C. & Verbič, Gregor, 2019. "Energy management of small-scale PV-battery systems: A systematic review considering practical implementation, computational requirements, quality of input data and battery degradation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 555-570.
    2. Alejandro Pena-Bello & Edward Barbour & Marta C. Gonzalez & Selin Yilmaz & Martin K. Patel & David Parra, 2020. "How Does the Electricity Demand Profile Impact the Attractiveness of PV-Coupled Battery Systems Combining Applications?," Energies, MDPI, vol. 13(15), pages 1-19, August.
    3. Heleno, Miguel & Sehloff, David & Coelho, Antonio & Valenzuela, Alan, 2020. "Probabilistic impact of electricity tariffs on distribution grids considering adoption of solar and storage technologies," Applied Energy, Elsevier, vol. 279(C).
    4. Kazhamiaka, Fiodar & Jochem, Patrick & Keshav, Srinivasan & Rosenberg, Catherine, 2017. "On the influence of jurisdiction on the profitability of residential photovoltaic-storage systems: A multi-national case study," Energy Policy, Elsevier, vol. 109(C), pages 428-440.
    5. Anilkumar, T.T. & Simon, Sishaj P. & Padhy, Narayana Prasad, 2017. "Residential electricity cost minimization model through open well-pico turbine pumped storage system," Applied Energy, Elsevier, vol. 195(C), pages 23-35.
    6. Georgiou, Giorgos S. & Christodoulides, Paul & Kalogirou, Soteris A., 2019. "Real-time energy convex optimization, via electrical storage, in buildings – A review," Renewable Energy, Elsevier, vol. 139(C), pages 1355-1365.
    7. Wilkinson, Sam & Maticka, Martin J. & Liu, Yue & John, Michele, 2021. "The duck curve in a drying pond: The impact of rooftop PV on the Western Australian electricity market transition," Utilities Policy, Elsevier, vol. 71(C).
    8. Angenendt, Georg & Zurmühlen, Sebastian & Axelsen, Hendrik & Sauer, Dirk Uwe, 2018. "Comparison of different operation strategies for PV battery home storage systems including forecast-based operation strategies," Applied Energy, Elsevier, vol. 229(C), pages 884-899.
    9. Paul Wolfram & Stephanie Weber & Kenneth Gillingham & Edgar G. Hertwich, 2021. "Pricing indirect emissions accelerates low—carbon transition of US light vehicle sector," Nature Communications, Nature, vol. 12(1), pages 1-8, December.
    10. Jayaraj, Nikhil & Klarin, Anton & Ananthram, Subramaniam, 2024. "The transition towards solar energy storage: a multi-level perspective," Energy Policy, Elsevier, vol. 192(C).
    11. Vieira, Filomeno M. & Moura, Pedro S. & de Almeida, Aníbal T., 2017. "Energy storage system for self-consumption of photovoltaic energy in residential zero energy buildings," Renewable Energy, Elsevier, vol. 103(C), pages 308-320.
    12. Ahsan, Syed M. & Khan, Hassan A. & Hassan, Naveed-ul & Arif, Syed M. & Lie, Tek-Tjing, 2020. "Optimized power dispatch for solar photovoltaic-storage system with multiple buildings in bilateral contracts," Applied Energy, Elsevier, vol. 273(C).
    13. Yang, Fei & Xia, Xiaohua, 2017. "Techno-economic and environmental optimization of a household photovoltaic-battery hybrid power system within demand side management," Renewable Energy, Elsevier, vol. 108(C), pages 132-143.
    14. Runsen Zhang & Tatsuya Hanaoka, 2022. "Cross-cutting scenarios and strategies for designing decarbonization pathways in the transport sector toward carbon neutrality," Nature Communications, Nature, vol. 13(1), pages 1-10, December.
    15. Yuan, Shengxi & Stainsby, Wendell & Li, Mo & Xu, Kewei & Waite, Michael & Zimmerle, Dan & Feiock, Richard & Ramaswami, Anu & Modi, Vijay, 2019. "Future energy scenarios with distributed technology options for residential city blocks in three climate regions of the United States," Applied Energy, Elsevier, vol. 237(C), pages 60-69.
    16. Nimalsiri, Nanduni I. & Ratnam, Elizabeth L. & Mediwaththe, Chathurika P. & Smith, David B. & Halgamuge, Saman K., 2021. "Coordinated charging and discharging control of electric vehicles to manage supply voltages in distribution networks: Assessing the customer benefit," Applied Energy, Elsevier, vol. 291(C).
    17. Bordin, Chiara & Anuta, Harold Oghenetejiri & Crossland, Andrew & Gutierrez, Isabel Lascurain & Dent, Chris J. & Vigo, Daniele, 2017. "A linear programming approach for battery degradation analysis and optimization in offgrid power systems with solar energy integration," Renewable Energy, Elsevier, vol. 101(C), pages 417-430.
    18. Jiyoung Eum & Yongki Kim, 2020. "Analysis on Operation Modes of Residential BESS with Balcony-PV for Apartment Houses in Korea," Sustainability, MDPI, vol. 13(1), pages 1-9, December.
    19. Giovani Almeida Dávi & José López de Asiain & Juan Solano & Estefanía Caamaño-Martín & César Bedoya, 2017. "Energy Refurbishment of an Office Building with Hybrid Photovoltaic System and Demand-Side Management," Energies, MDPI, vol. 10(8), pages 1-24, August.
    20. Crossin, Enda & Doherty, Peter J.B., 2016. "The effect of charging time on the comparative environmental performance of different vehicle types," Applied Energy, Elsevier, vol. 179(C), pages 716-726.

    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:gam:jsusta:v:16:y:2024:i:23:p:10432-:d:1532014. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.