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Making the case for time-of-use electric rates to boost the value of battery storage in commercial buildings with grid connected PV systems

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  • Sepúlveda-Mora, Sergio B.
  • Hegedus, Steven

Abstract

We performed a techno-economic analysis of behind-the-meter photovoltaics (PV) coupled with lithium-ion battery storage under a flat rate and a time-of-use (TOU) rate for commercial buildings using HOMER Grid software. Unique contributions from this work include determining the impact that the battery degradation limit has on the cost-effectiveness of the system, and demonstrating the impact of tariff rates using high-resolution real load data of commercial buildings with different energy usage during a project lifetime of 25 years. From the results, we found that delaying the replacement of the battery has a substantial economic benefit for the system owner. Letting the battery degrade to 50% of initial capacity is comparable to a 30% reduction in the battery capital cost during the lifetime of the project because the battery will be replaced only once instead of twice lowering the Net Present Cost. The ability of a given building to benefit from solar-plus-storage depends on the degradation limit and tariff structure, but it does not depend strongly on the load pattern and size. We conclude that TOU tariffs would promote more rapid cost-effective adoption of PV systems with batteries in commercial buildings in the upcoming years.

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  • Sepúlveda-Mora, Sergio B. & Hegedus, Steven, 2021. "Making the case for time-of-use electric rates to boost the value of battery storage in commercial buildings with grid connected PV systems," Energy, Elsevier, vol. 218(C).
    • Handle: RePEc:eee:energy:v:218:y:2021:i:c:s0360544220325548
    DOI: 10.1016/j.energy.2020.119447
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    5. Ghafoori, Mahdi & Abdallah, Moatassem & Kim, Serena, 2023. "Electricity peak shaving for commercial buildings using machine learning and vehicle to building (V2B) system," Applied Energy, Elsevier, vol. 340(C).
    6. Arsalis, Alexandros & Papanastasiou, Panos & Georghiou, George E., 2022. "A comparative review of lithium-ion battery and regenerative hydrogen fuel cell technologies for integration with photovoltaic applications," Renewable Energy, Elsevier, vol. 191(C), pages 943-960.
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    8. Dirk Johan van Vuuren & Annlizé L. Marnewick & Jan Harm C. Pretorius, 2021. "A Financial Evaluation of a Multiple Inclination, Rooftop-Mounted, Photovoltaic System Where Structured Tariffs Apply: A Case Study of a South African Shopping Centre," Energies, MDPI, vol. 14(6), pages 1-26, March.
    9. Ferahtia, Seydali & Djeroui, Ali & Rezk, Hegazy & Houari, Azeddine & Zeghlache, Samir & Machmoum, Mohamed, 2022. "Optimal control and implementation of energy management strategy for a DC microgrid," Energy, Elsevier, vol. 238(PB).
    10. Zhang, Yin & Qian, Tong & Tang, Wenhu, 2022. "Buildings-to-distribution-network integration considering power transformer loading capability and distribution network reconfiguration," Energy, Elsevier, vol. 244(PB).
    11. Shabani, Masoume & Wallin, Fredrik & Dahlquist, Erik & Yan, Jinyue, 2023. "The impact of battery operating management strategies on life cycle cost assessment in real power market for a grid-connected residential battery application," Energy, Elsevier, vol. 270(C).
    12. Chen, Qi & Kuang, Zhonghong & Liu, Xiaohua & Zhang, Tao, 2022. "Energy storage to solve the diurnal, weekly, and seasonal mismatch and achieve zero-carbon electricity consumption in buildings," Applied Energy, Elsevier, vol. 312(C).
    13. Wen, Kerui & Li, Weidong & Yu, Samson Shenglong & Li, Ping & Shi, Peng, 2022. "Optimal intra-day operations of behind-the-meter battery storage for primary frequency regulation provision: A hybrid lookahead method," Energy, Elsevier, vol. 247(C).
    14. Ciprian Cristea & Maria Cristea & Dan Doru Micu & Andrei Ceclan & Radu-Adrian Tîrnovan & Florica Mioara Șerban, 2022. "Tridimensional Sustainability and Feasibility Assessment of Grid-Connected Solar Photovoltaic Systems Applied for the Technical University of Cluj-Napoca," Sustainability, MDPI, vol. 14(17), pages 1-23, August.
    15. Sepúlveda-Mora, Sergio B. & Hegedus, Steven, 2022. "Resilience analysis of renewable microgrids for commercial buildings with different usage patterns and weather conditions," Renewable Energy, Elsevier, vol. 192(C), pages 731-744.

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