Photovoltaic energy systems with battery storage for residential areas: an economic analysis

Significance Statement

Photovoltaic energy finds its application in various fields like agriculture, industry, telecommunication, etc. In the global energy market, photovoltaic energy helps in creating a sustainable development. Various methods have been adopted to decrease the emission of greenhouse gases into the atmosphere. To decrease the global temperature level, burning of fossil fuels should be eliminated. Renewable sources of energy are used as an alternative to fossil fuels. The demand for energy and its consumption is increasing every year.

A group of researchers from the University of L’Aquila in Italy considered a residential sector where they evaluated the profitability of mono-crystalline photovoltaic systems, without any subsidies. They also evaluated the profitability of lead acid energy storage system. Based on discounted cash flows, a quantitative analysis is proposed with a sensitivity analysis of the photovoltaic system; its investment cost, electricity purchase and sale prices, insolation levels, battery storage capacities was also conducted.

The authors performed a case study which showed that the installed power and the electrical generation increased every year. To reduce the emission of carbon dioxide, two parameters were considered; one is the emissions released by a national energy mix and the other is the emissions released by the photovoltaic system. To increase self-consumption, the energy storage system is considered.

Photovoltaic system saves energy through internal consumption. The investment cost is high for implementing the system. But, the operation and the maintenance cost are low due to free solar radiation. There are several factors through which the energy output of the photovoltaic system depends. The factors include the insolation rate, the efficiency of balance of system, the installed photovoltaic modules and the nominal power of the modules.

An efficiency reduction factor is considered for the photovoltaic system. The profit obtained from the energy storage system is obtained by saving energy through internal consumption. Photovoltaic systems play a major role in environmental protection and also serve as an economic opportunity. The performance is improved by increasing self-consumption. In sunny areas, photovoltaic systems produce high amount of energy and hence the potential revenue in southern regions are more than the northern regions.

Harmonization between the consumption and production of energy is achieved by using the energy in periods of solar productivity or by using intelligent machinery. A set of input variable is assumed and the net present value is taken. A sensitivity analysis is implemented on the critical variables. By implementing a battery in the photovoltaic system, the intermittence of energy can be resolved. The stability of the applications is thus achieved. The size of the battery and its capacity to store energy need to be considered based on the applications and the demand for energy.

From the proposed mathematical model, the authors defined the breakeven point at which the photovoltaic battery system becomes economically feasible (see figure 1). Static and dynamic scenarios is proposed for the uncertainty that adversely affect the decision making process. Photovoltaic sector plays a strategic role in energy economics. This source is being developed in major countries for clean energy production.

Photovoltaic energy systems with battery storage for residential areas: an economic analysis - renewable energy global innovations

About the author

Federica Cucchiella is an Associate Professor of Managerial Engineering in the Department of Industrial and Information Engineering & Economics, University of L’Aquila. In this University she teaches Managerial Economy. Her principal area of research regards supply chain management, real option and green supply chain. The results of her researchers are published on relevant international journals, book chapter and referred conference proceedings.

She has participated in several research projects on natural resources and supply chain management. She has organized a number of international and national conferences mainly in the field of supply chain and green supply chain management. She has received scholarships and prizes for academic excellence from various academic institutions and foundations.

She is a member of Editorial board of International Journal of Logistics Economics and Globalisation by Emerald. She is author of more than 60 papers published on refereed books, journals and conference proceedings.

About the author

Idiano D’Adamo was born in Vasto (Italy) in 1983. In 2008, he received the Master of Science in Management Engineering title. In 2012, he received the PhD in Electrical and Information Engineering. Both these titles were received from the University of L’Aquila. He worked in the University of Sheffield, the National Research Council of Italy and Politecnico di Milano. Currently, he is a postdoctoral researcher at the University of L’Aquila. In August 2015, he published a paper in Renewable and Sustainable Energy Reviews that was awarded with the Elsevier Atlas price. During its academic career, Idiano D’Adamo published 36 papers (publicly available in the Scopus database), receiving 501 citations and reaching an h-index of 14.His current research interests are sustainability, renewable energies management and waste management.

About the author

Massimo Gastaldi is an Associate Professor in Managerial Engineering at University of L’Aquila since 1998 at Department of Industrial and Information Engineering and Economics where he teaches Applied Economics in Engineering Science and Analysis of Financial Systems. Since 1991 he has contributed with several publications and edited books working for National Research Council (C.N.R.) and at University of Rome “Tor Vergata”. In 1995 he was visiting professor at the California State University, San Marcos, USA and in 1997 at Colorado University, Builder, USA.

Current research issues: regulation and public utilities, green supply chain management, renewable energy and real options, financial analysis. He was responsible manager of private and public research projects. He is editor in chief of the International Journal of Management and Network Economics published by Inderscience. He is author of more than 130 papers published on refereed books, journals and conference proceedings.

Journal Reference

Federica Cucchiella, Idiano D’Adamo, Massimo Gastaldi, Photovoltaic energy systems with battery storage for residential areas: an economic analysis, Journal of Cleaner Production, Volume 131, 2016, Pages 460–474.

Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy.

 

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