End-user economics of PV-coupled residential battery systems in the Netherlands

Abstract

Due to a decline in prices of lithium-ion battery storage systems, a steep growth in photovoltaic installations in the Netherlands, and the announced phasing out of Dutch net metering policy, residential PV-coupled battery electric storage systems (PV-BESS) are attracting more research as well as more interest of the Dutch PV market. In this paper the end-user economics and policy dependencies of PV-BESS in the Netherlands were studied. In addition, an understanding of the Dutch market potential of lithium-ion home storage till 2030 was acquired. By comparing the legal environment for PV-BESS in the Netherlands with other European countries that have already achieved significant residential PV-BESS capacity, it becomes clear that the Netherlands lacks a clear legal definition for (battery) storage, a matured PV-market and financial benefits for investing in residential battery systems. Subsequently, four regulatory frameworks are considered for analyzing the economics of PV-BESS systems. A model that optimizes for self-consumption is deployed to determine self-consumption rates for different PV-BESS system sizes installed for an average household. It shows that investing in residential batteries in the Netherlands under current policy will continuously result in longer payback periods (PBP’s) than PV-only systems. Nevertheless, PBP’s for all considered PV-BESS configurations are in the realm of profitability with PBP’s shorter than their respective lifetime of 15 years. When an investment policy of 30% of initial investment costs would be introduced under current policy, however, investments in PV-BESS systems would achieve shorter payback periods than PV-only systems after 2023-2029, depending on the system size and decline in BESS costs. Consequently, the most optimistic scenario for the battery storage market in the Netherlands (assuming a direct introduction of the aforementioned investment subsidy, linear growth of Dutch residential PV capacity and German-like growth of BESS capacity), would result in €130 million &€778 million of revenue for the energy storage branch in 2025 and 2030, respectively. This indicates an upper limit of what could be expected for the future Dutch battery storage market. Lastly, several implications of this research are discussed, and multiple recommendations for future research are made.