The Value of Distributed Energy Resources for Heterogeneous Residential Consumers

TL;DR

This paper evaluates the economic benefits of rooftop photovoltaics and storage for diverse residential consumers, highlighting how pricing policies, forecasting, and coordination influence savings and adoption.

Contribution

It provides a detailed quantification of household heterogeneity, the impact of policies, and the limited incentives for coordination in residential energy resource deployment.

Findings

Household savings vary significantly under different pricing policies.

Coordination can reduce costs by 10-15%.

Adoption beyond 35-55% is unlikely without incentives.

Abstract

The presence of behind-the-meter rooftop photovoltaics and storage in the residential sector is poised to increase significantly. Here we quantify in detail the value of these technologies to consumers and service providers. We characterize the heterogeneity in household electricity cost savings under time-varying prices due to consumption behavior differences. Different pricing policies significantly alter how households fare with respect to one another. Furthermore, household savings in absolute terms are not strongly correlated with savings normalized by PV and storage system size. We characterize the financial value of improved forecasting capabilities for a household, finding that it is a relatively small fraction of a household's cost savings. Coordination services that combine the resources available at all households can reduce costs by an additional 10% to 15% of the original total cost. Surprisingly, coordination service providers will not encourage adoption beyond 35-55% within a group. We present a simple model that explains the value of coordination and its relationship to the pricing of distribution services.