Impact of subsidy on profitability of residential photovoltaics, battery and inverter in Flanders

TL;DR

This study evaluates how subsidies impact the profitability of residential photovoltaic, battery, and inverter systems in Flanders, highlighting policy effects and investment strategies for prosumers.

Contribution

It provides a detailed analysis of subsidy effects on prosumer investment payback periods for residential PV, batteries, and inverters using realistic market scenarios.

Findings

Subsidies favor new PV installations.

Oversizing PV improves profitability.

Batteries mainly for arbitrage have high payback periods.

Abstract

The sustained future growth of renewable energy in the distribution network is governed by its financial viability. The recent subsidies in Flanders for photovoltaic (PV) and battery are used to calculate the payback period on prosumer investment in residential PV, battery and inverter installations. Realistic scenario of PV, battery and inverter are created based on the market catalogue of one manufacturer per product. Using these scenarios, one-year simulations for a residential prosumer are conducted in a rolling horizon. Luminus, an energy service provider in Limburg, time-of-use and feed-in-tariff contract rates are utilized. The numerical evaluation indicates that the policies prefer new PV installations. The subsidy comparison for 2021 to 2024 is also conducted. Oversizing PV compared to inverter size increases profitability. Batteries performing only arbitrage may not attract much investment, as the payback period is high. This shows the need to maximize the value addition of prosumer investment on residential batteries by participating in multiple goals.