Policy options for enhancing economic profitability of residential solar photovoltaic with battery energy storage

Share of solar photovoltaic (PV) is rapidly growing worldwide as technology costs decline and national energy policies promote distributed renewable systems. Solar PV can be paired with storage systems to increase the self-consumption onsite, possibly provide grid-level services, such peak shaving load levelling. However, investment on may not return under current market conditions. We propose three types incentivise residential electricity consumers pair battery storage, namely, a feed-in tariff bonus; “energy policies” for rewarding discharge from home batteries at times grid needs most; dynamic retail pricing mechanisms enhancing arbitrage value storage. soft-link consumer cost optimization model power system analyse impact proposed economic viability PV-storage end-users in UK. The results show that replacing generation incentives corresponding bonus offers battery, equal 70% capital subsidy but one-third regulatory costs. offer positive 40% when pairing PV, without need central coordination decentralized nor providing ancillary services by buildings. find choice optimal size tariffs are key maximize profitability PV-battery