Techno-Economic Factors Impacting the Intrinsic Value of Behind-the-Meter Distributed Storage

Abstract

With the increasing adoption of renewable energy, there is a growing need for efficient storage solutions. Battery storage is becoming an essential tool for maintaining grid reliability and handling the variable nature of renewable energy sources. This research focuses on behind-the-meter, grid-connected household systems in Western Australia, adopting a consumer perspective to evaluate the financial viability of residential batteries. Using the HOMER Grid for techno-economic modeling, eight factors influencing financial viability were analyzed, with results validated through two external case studies. The findings suggest that photovoltaic (PV) systems paired with batteries can be cost-effective at current prices, depending on load profiles, tariffs, and grid sale limits. However, many factors lie outside the consumer’s control, contributing to significant financial uncertainty and limiting widespread battery adoption. Eliminating flat tariffs could make PV + Battery systems financially viable, although this may negatively affect other consumers on the grid. Even with a 30% reduction in battery price, PV-only systems remain optimal for many households. This study concludes that addressing and reducing consumer uncertainty is essential for encouraging the wider adoption of residential battery storage systems. At the same time, non-financial motivations such as energy independence or environmental concerns may drive early adopters in the interim.