Decentralized solar prosumage with battery storage: system orientation required

Economic Bulletin of March 29, 2017

Starting from a low level, in recent years the battery-supported self-consumption of solar electricity (solar prosumage) has grown significantly in Germany. Its growth is primarily due to the opposing trends in household electricity prices and feed-in tariffs in conjunction with government incentives for battery storage. Various benefits of solar prosumage speak to its positive potential in the German energy transformation. It takes consumer preferences into consideration, may increase general acceptance of the energy transformation—facilitating private participation in investment in the process—and relieves distribution networks. However, solar prosumage also has potential disadvantages, especially with regard to economic efficiency. Total system costs are lower if decentralized batteries are operated in a system-oriented way and if they are available for further electricity market activities, as compared to a case where distributed storage is purely focused on self-consumption. This is the finding of a model analysis carried out at DIW Berlin. It is also the reason why policymakers should focus on ensuring that photovoltaic battery systems are designed and operated to serve the overall system. Conversely, the Renewable Energy Sources Act (EEG) surcharge for solar prosumage should be abolished. In addition, models allowing tenants to generate and store their own solar electricity should not be disadvantaged, and political scenarios relevant to energy policy must take solar prosumage into adequate consideration. The political framework for photovoltaic battery storage systems must be structured in a way that minimizes undesirable effects.