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Investment valuation of photovoltaic and energy storage systems for diverse energy communities: A real option approach

Author

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  • De Blasis, Riccardo
  • Pacelli, Graziella
  • Vergine, Salvatore

Abstract

The use of energy storage devices and renewable energy sources has evolved over the past few decades from an individual to a community concept, whereby the energy produced and stored is distributed among energy community participants. In this context, there is a need to provide an investment strategy to decide whether and when to invest in a photovoltaic-battery system to cover the energy demand. Therefore, we propose an optimization methodology to assess the profitability of these systems to be installed in such energy communities while exploiting the variability of the demand curves from different types of users. Moreover, considering the future uncertainty of photovoltaic production, energy demand, and price of electricity, we evaluate the possibility of deferring the investment by employing a real option approach. We perform the analysis on several energy communities composed of different types of users. Results show that being part of a diverse energy community guarantees savings in terms of total costs and battery capacity, together with a reduction in investment time and an increase in the value of the option.

Suggested Citation

  • De Blasis, Riccardo & Pacelli, Graziella & Vergine, Salvatore, 2026. "Investment valuation of photovoltaic and energy storage systems for diverse energy communities: A real option approach," Applied Energy, Elsevier, vol. 404(C).
    • Handle: RePEc:eee:appene:v:404:y:2026:i:c:s0306261925019154
    DOI: 10.1016/j.apenergy.2025.127185
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