Value of Residential Investment in Photovoltaics and Batteries in Networks: A Techno-Economic Analysis

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Australia has one of the highest rates of residential photovoltaics penetration in the world. The willingness of households to privately invest in energy infrastructure, and the maturing of battery technology, provides significant scope for more efficient energy networks. The purpose of this paper is to evaluate the scope for promoting distributed generation and storage from within existing network spending. In this paper, a techno-economic analysis is conducted to evaluate the economic impacts on networks of private investment in energy infrastructure. A highly granular probabilistic model of households within a test area was developed and an economic evaluation of both household and network sectors performed. Results of this paper show that PV only installations carry the greatest private return and, at current battery prices, the economics of combined PV and battery systems is marginal. However, when network benefits arising from reducing residential evening peaks, improved reliability, and losses avoided are considered, this can more than compensate for private economic losses. The main conclusion of this paper is that there is significant scope for network benefits in retrofitting existing housing stock through the incentivization of a policy of a more rapid adoption of distributed generation and residential battery storage.