Techno-economic analysis of self-consumption in the residential sector and the associated effect on the electricity network

Abstract

Currently, over 600,000 households are equipped with a PV system in the Netherlands. This number is expected to increase in the coming years due to climate targets set by the European Union and the rapid decline in investment costs. To stimulate residential grid-connected PV systems, the Netherlands has currently the net metering policy in force. However, this net metering policy will be gradually abolished between 2023 and 3031. Increased self-consumption or incentives could raise the profitability of PV systems and lower the stress on the electricity grid. In this study, several self-consumption measures are tested in alternative policies. When the net metering system is maintained, the minimum PBP of a 3 kWp PV system is at least 4.0 years in 2020. When the net metering system is abolished this PBP will increase toward 2031. An average household (that consumes annually 2790 kWh) equipped with a 3 kWp PV system (which generates annually 2896 kWh) holds a self-consumption ratio of 29%. The integration of a 7 kWh lithium-ion battery can result in an increase of the self-consumption ratio to 64%. The difference in network impact between a PV system and a PV system with BESS can be seen in winter and summer. In winter most of the overproduction is stored in the BESS which removes most of the power peaks. In summer, however, the overproduction is much larger of which only a part is stored in the BESS to fulfil the demand until the next day. Therefore, BESS’s does not affect the amplitude of the power demand peaks in but only the duration in summer. It is recommended to the Dutch government to continue the current policy to encourage prosumers to increase their self-consumption over time as the investment costs of BESS’s are expected to decrease. An investment subsidy can be applied when the PBP becomes too long. By changing to a feed-in tariff or net billing policy, the PBP becomes higher but prosumers are immediately incentivised to use the BESS as it is much more cost-effective to store electricity on the BESS and used later than returning electricity to the grid. By stopping the reimbursement for excess electricity in the net metering abolishment policy, households that already have a PV system installed are even more encouraged to invest in a BESS. However, stopping the reimbursement for excess electricity will also increase the PBP of a combined PV system and BESS.