Techno-economic impact of electricity price mechanism and demand response on residential rooftop photovoltaic integration

Abstract

Rooftop distributed photovoltaics show great potential for deep decarbonisation in the residential sector. However, the intermittency and undispatchability of photovoltaic output are urgent problems in the large-scale deployment of rooftop distributed photovoltaics. This study develops a techno-economic evaluation framework for rooftop distributed photovoltaics by comprehensively considering and exploring the uncertain effects of electricity price mechanisms, battery energy storage, demand response for residential flexible loads, and residential electricity demand difference to increase self-consumption and the economic benefits of rooftop distributed photovoltaics. The results show that electricity price mechanisms are the main factors affecting the economic benefits of rooftop distributed photovoltaics, which are more economical under time-of-use prices than under flat prices. Installing battery energy storage and participating in demand response for residential flexible loads can significantly improve self-consumption and self-sufficiency rates, and bring more electricity bill savings and less feed-in revenue. Specifically, the relative economic benefits of installing battery energy storage and demand response were greater at lower feed-in tariffs. Moreover, the greater the ratio of annual residential electricity demand to photovoltaic power generation, the greater the self-consumption rate. Further, only when battery energy storage is installed, the smaller the ratio, the greater the self-sufficiency rate. Consequently, the energy sector can design more efficient time-of-use pricing mechanisms and adopt lower feed-in tariffs to encourage residential consumers to deploy both rooftop distributed photovoltaics and battery energy storage and to participate in demand response.