Compensation rules for residential rooftop solar are shifting toward a model that encourages customers to use battery storage to maximize solar self-consumption.
A paper recently published by researchers at the Energy Department’s Berkeley Lab sets out to examine whether or not this trend is a good thing.
The article, “Private vs. public value of U.S. residential battery storage operated for solar self-consumption,” was published in iScience. It attempts to quantify the value of using residential battery storage to maximize solar self-consumption from the perspectives of both the individual solar customer and the larger power system.
The researchers said the question is becoming more relevant as states replace traditional net metering rules with net billing structures.
Net billing is a construct that allows customers to offset their own consumption with solar on an instantaneous or hourly basis, receiving full retail rate credit for that portion of their solar. Any solar generation that is exported to the grid is compensated at a reduced rate.
The researchers said this kind of “asymmetric pricing structure” incentivizes solar customers with battery storage to charge their batteries with surplus solar and discharge that stored solar energy to serve load during evening and nighttime hours.
The study based its analysis on hourly metered loads from roughly 1,800 residential customers across six utility service territories. Key findings include:
· Even under a relatively optimistic set of assumptions, the bill savings from using storage in this manner would not be nearly enough ($14-27 per kWh of storage capacity, annually, across the sample of customers) to justify the current up-front cost of residential battery storage.
· Storage used for solar self-consumption yields virtually no value to the bulk power system in terms of reduced wholesale energy costs. This is primarily due, the paper said, to a “misalignment” between the temporal profiles of storage dispatch and wholesale energy prices. The analysis showed that even in a future with high solar penetration, where wholesale prices resemble the proverbial “duck curve,” the energy value of storage dispatched for solar self-consumption “remains highly suboptimal.”
· Storage used for solar self-consumption also yields virtually no value in terms of reduced peak-related costs, such as those related to generation, transmission, and distribution system capacity. This is largely because almost all solar generation on peak-load days is used to directly serve onsite customer load. This results in little surplus solar energy available to fuel storage discharge during peak-load hours later in the day. As a result, the paper said, battery storage largely sits idle on those days, barring other incentive to operate for system-peak reduction purposes.
The analysis compares the results to what would occur if storage were, instead, operated optimally from the power system perspective, independent of customer load.
For the locations and time periods analyzed, the system value equated to $16-33 per kWh of storage capacity.
The paper also explains how net billing tariffs could be designed or coupled with other incentives in a manner that could capture a large fraction of that potential system value, without degrading solar self-consumption levels or imposing significant additional stress on the local distribution network.
In part, it said, that can be achieved by allowing and incentivizing limited storage discharge to the grid during infrequent, high-value hours.
A copy of the paper may be downloaded here.