Interdependencies between self-sufficiency preferences, techno-economic drivers for investment decisions and grid integration of residential PV storage systems

Highlights: • Model of investment drivers of photovoltaic (PV) and battery storage systems (BSSs). • Interdependencies between self-sufficiency, BSS incentive and PV grid integration. • BSSs enable larger PV systems without providing a benefit for PV grid integration. • Quantitative analyses show self-sufficiency and BSS subsidy foster larger PV systems. • Network operators should adjust guidelines for PV BSSs and adopt feed-in limits. The business case for residential photovoltaic (PV) systems in combination with battery storage systems (BSSs) is thriving in Germany. Next to an increasing spread between electricity prices and feed-in tariffs (FITs), the adoption of PV BSSs is fostered by a preference for higher self-sufficiency and a federal investment incentive for PV BSSs. Such an incentive subsidizes BSSs on the promise of facilitating PV grid integration. However, so far a comprehensive analysis of implications of self-sufficiency desire and investment incentive for PV BSS sizing and operation and their grid integration is missing. To enable the key stakeholders – PV BSS investors, distribution network operators and policy makers – to derive a better understanding of the underlying interdependencies between these drivers and the corresponding sizing and operation of PV BSSs, an optimization model is developed. The model includes all relevant cash flows for the business case of PV BSSs, e.g. surcharges on PV self-consumption, and an approach for adopting preferences for self-sufficiency. A case study-based analysis shows that the desire for self-sufficiency and the BSS investment incentive lead to larger PV systems. From a PV grid integration perspective, a grid-supporting BSS operation is contradicted by larger system sizes fostered by the investment incentive and self-sufficiency desires. Imposing stricter feed-in limits and adjusting the residential PV support mechanism entail chances to enable larger PV systems sizes while also limiting their grid impact.