Molehills into mountains: Transitional pressures from household PV-battery adoption under flat retail and feed-in tariffs

Abstract

With Australia's significant existing household PV capacity, decreasing battery costs may lead to widespread household PV-battery adoption. As the sizing of these systems are heavily influenced by retail tariffs, this paper analyses the effect of flat retail tariffs on households free to invest in PV battery systems. Using Perth, Australia for context, an open-source model is used to simulate household PV battery investments over a 20-year period. We find that flat usage and feed-in tariffs lead to distinct residual demand patterns as households' transition from PV-only to PV-battery systems. Qualitatively analysing these patterns from the bottom-up, we identify transitional tipping points that may challenge future electricity system management, market participation and energy policies. The continued use of flat tariffs incentivises PV-battery households to maximise self-consumption, which reduces annual grid-imports, increases annual grid-exports, and shifts residual demand towards winter. Diurnal and seasonal demand patterns continue to change as PV-battery households eventually become net-generators. Unmanaged, these bottom-up changes may complicate energy decarbonisation efforts within centralised electricity markets and suggest that policymakers should prepare for PV-battery households to play a more active role in the energy system.