Residential photovoltaic and energy storage systems for sustainable development: An economic analysis applied to incentive mechanisms

Abstract

The photovoltaic (PV) system has a very significant growing global trend and its role is essential in combating climate change. However, its intermittent nature requires integration with a battery energy storage system (BES). This work proposes an economic analysis based on net present value (NPV) for an integrated PV + BES system in a mature market (Italy). The analyses are applied to different policy (used for both PV and BES) and market (purchase price, selling price) contexts. Results show that the NPV(PV) ranges from 1061 to 7426 €/kW. The work identifies the conditions under which BES is affordable. The required increase in self‐consumption varies in the 14%–35% range. The purchase price and the percentage of energy‐self‐consumption play a crucial role in the profitability assessment of a PV + BES system. Incentive policies based on subsidized tax deductions and subsidies for energy produced and self‐consumed can enable a more sustainable energy future in the residential sector. This work suggests a mix of policy choices: (i) a subsidized tax deduction larger than 50% and a bonus for energy produced and self‐consumed for PV plants; (ii) subsidized tax deduction also for BESs but at a lower value than for PV plants; and (iii) encouraging a recycling industry.

Financial Investment Valuation Models for Photovoltaic and Energy Storage Projects: Trends and Challenges

“…They concluded that replacing incentives for PV generation with a self-consumption bonus offers a return on investment in household energy storage systems equivalent to a capital subsidy on these systems and improves the cost-effectiveness when these systems are combined with PV. D'Adamo et al [35] argued that incentives based on tax deductions and subsidies for energy produced and self-consumed by PV generation systems integrated with storage systems can facilitate a sustainable energy future in the residential sector. The authors suggested a combination of policies: (i) subsidized tax deduction and rebate for generated and self-consumed energy for PV plants; (ii) subsidized tax deduction for battery-based storage systems at a lower value than PV plants; and (iii) promotion of the recycling industry.…”

“…He studied in [40] the performance and economic benefits of adding BPA and Li ion battery systems to residential PV generation with different retail prices. Regarding the work carried out by the most relevant researchers on the subject, due to their number of publications and the fact that these are linked to the investment valuation of photovoltaic energy generation projects with storage, it was found that Idiano D'Adamo addressed in his publications the analysis and economic viability of photovoltaic systems with energy storage for the case of residences [29][30][31][32][33][34][35] and considered the impact of incentives and subsidies for these projects. The studies of this researcher were carried out in co-authorship with Massimo Gastaldi [33,34] and between Federica Cucchiella and Massimo Gastaldi [29][30][31]34].…”

“…Regarding the first trend (Figure 13), [97] indicated that decarbonizing buildings is one of the key ways to stop or reverse climate change. Within this trend, it can be mentioned the studies by [29,31,32,35,69,71,90,95] that addressed the techno-economic or optimization analysis of residential photovoltaic or hybrid systems with storage. Additionally, there are studies by [98] who proposed policies to encourage households to have photovoltaic systems with batteries (PV-B) and [33] in which they evaluate the impact on the Net Present Value of a tax deduction on the residential photovoltaic system with batteries as an energy storage system.…”

Marine Predator Algorithm-Based Optimal PI Controllers for LVRT Capability Enhancement of Grid-Connected PV Systems

“…This system has numerous benefits, including the precision and dependability with which it generates power. Since grid-connected PV systems can cover the energy demands of multiple industries, they are becoming increasingly popular as power demand grows [8][9][10].…”

Development of a Tool for Sizing and Technical–Financial Analysis of Energy‐Storage Systems Using Batteries

“…The study in ref. [15] provides a feasibility analysis for the self‐consumption of these integrated systems in residences, thereby reducing reliance on the grid and offering greater financial returns for the user. Furthermore, it encompasses the combination of BESS with solar PV sources and suggests incentive policies, including a tax deduction of over 50% and a bonus for produced and self‐consumed energy in PV installations; a tax deduction for BESS, albeit at a lower rate compared to the PV system; and support for the recycling industry.…”