Leaving the grid: An ambition or a real choice?

Abstract

The recent rapid decline in PV prices has brought grid parity, or near grid parity for PV in many countries. This, together with an expectation of a similar reduction for battery prices has prompted a new wave of social and academic discussions about the possibility of installing PV–battery systems and “leaving the grid” or “living off-grid”. This, if uncontrolled, has been termed the “death spiral” for utility companies.We have developed a decision support tool for rigorous assessment of the feasibility of leaving the grid. Numerous sensitivity analyses are carried out over critical parameters such as technology costs, system size, consumer load, and feed-in-tariff. The results show that, in most cases, leaving-the-grid is not the best economic option and it might be more beneficial to keep the connection with the grid, but minimize the electricity purchased by installation of an optimized size of PV-battery systems.The policy implication of this study is that, from an economic perspective, widespread disconnection might not be a realistic projection of the future. Rather, a notable reduction of energy demand per connection point is a more realistic option as PV–battery system prices decline further. Therefore, policies could be devised to help electricity network operators develop other sources of revenue rather than increasing energy prices, which have been assumed to be the key driver of the death spiral.