Life cycle cost optimization analysis of battery storage system for residential photovoltaic panels

Abstract

The current climate and energy policies of the European Union aim at achieving carbon dioxide emissions reduction and the promotion of clean energy. The priorities set concentrate on decarbonizing the energy sector, mainly by promoting renewables. At the same time, it is of great importance to effectively manage the energy generated in-situ within a community. That community can be approached as a micro-grid able either to be connected to the main grid or to be independent. In addition to this, storage of electricity seems the unavoidable solution for the effective energy management with the micro-grid. Due to the technological developments and the reduction in production costs that are expected to decrease even further in the coming years (50% reduction), batteries are a crucial factor for the effective integration of renewables on a residential scale. Thereafter, the proper size of a battery system plays an important role for the total minimization of system's cost during its lifetime. The purpose of the paper is to present a mathematical tool, able to manage the energy produced by residential photovoltaic panels, the energy stored in the batteries and the energy purchased from the main grid. Continuing with the energy management, the framework should come up with an optimized life cycle cost solution, regarding both the energy management within the grid and the optimum size of energy battery system. Main findings of the paper indicate that storage is a feasible option, whenever selling electricity to the main grid is not applicable, as for that case the battery capital cost should decrease to 400 (€/kWh); this is a 20% cost reduction compared to current prices and 30 (€/kWh).