Abstract
In many countries, the integration of growing shares of residential solar photovoltaics is beginning to challenge existing electricity systems. First, residential solar photovoltaics aggravates sharp system-wide load changes and, in turn, increases the need for fast-ramping generation capacity. Second, it reduces the demand for electricity provision from the grid, causing an increase in electricity prices as grid costs are recovered over smaller volumes of electricity. Battery storage (BS) mitigates the first integration challenge by flattening the system-wide load, but elevates the second by increasing self-consumption behind-the-meter. In face of this dilemma, the integration of high shares of residential solar photovoltaics requires policymakers to re-design public support policies. In this article, we develop an agent-based model to simulate California’s residential ‘solar-plus-storage’ market between 2005 and 2030 in four different policy scenarios. By applying a multi-technology, multi-policy approach, we quantify the complex interplay between the diffusion of individual technologies, several interacting policies and systemic challenges. Our results show that California’s policy status quo initiated a BS uptake and, in turn, a flattening of the system, but, in the long run, will increase the electricity prices. To avoid this, we outline a policy reorientation—including a gradual phase-out of the prevailing feed-in remuneration and an introduction of fixed charges for owners of solar photovoltaic systems. Our results imply that the policy debate should be re-focused away from a single-technology single-policy perspective towards a system integration perspective. Neglecting this could not only jeopardize the affordability of electricity and climate change mitigation plans, but also put at risk the reliability of the electricity supply system. With investment costs of renewables expected to continue to decrease, this further implies that even countries without public support for renewables are likely to face challenges associated with their integration.
Highlights
In many countries, widely deploying variable decentralized renewable energy resources has become central to reducing CO2 emissions and mitigating climate change (REN21 2017)
The scenario input to the model comprises the three most relevant policy instruments that economically affect California’s residential solar-plus-storage market (Darghouth et al 2011, McLaren et al 2015, Barbose et al 2016, Ossenbrink et al 2018); upfront support subsidies (PI 1) lower the investment costs; retail-rate designs (PI 2) determine the composition of residential electricity bills; feed-in remuneration (FIR) (PI 3) sets compensation for surplus PV generation exported to the grid
We study the ‘2018 Policy off’ scenario (S3), which depicts the immediate shutdown of upfront support (ITC, Self-Generation Incentive Program (SGIP)) and FIR (NEM 2.0) in 2018
Summary
Widely deploying variable decentralized renewable energy resources has become central to reducing CO2 emissions and mitigating climate change (REN21 2017). Higher PV market shares aggravate sharp system-wide residual load increases at sunset, demanding more fast-ramping generation capacity (Agnew and Dargusch 2015). Residential PV—often small in scale, nondispatchable, and spatially distribued—jeoparidze the reliability of electricity systems, which traditionally have been optimized for large-scale, centralized generation and long-distance transmission (Passey et al 2011). In the case of volumetric tariffs, this increases electricity prices as grid costs are recovered over smaller volumes (Laws et al 2017). Such a redistribution, combined with utilities’ feed-in remuneration (FIR) expenses, is likely to compromise the affordability of electricity— for lowincome households (Vaishnav et al 2017)—and may eventually erode public acceptance of renewable support policies
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
