Brattle economists have co-authored an article published in Utilities Policy that discusses how low-cost solar photovoltaics (PV) and battery electricity storage can potentially bring about fundamental shifts in the structure of the U.S. power sector.

In the article, the authors analyze how PV-battery systems of various sizes could reduce the dependence of residential customers on the central electric grid and evaluate their impact on carbon dioxide (CO2) emissions. They also analyze how the costs of these systems change as customers attempt to decrease their dependence on the grid, considering the installed cost of the PV-battery system and the cost of electricity under a net-energy metered rate structure.

By analyzing these relationships for residential customers in five locations across the U.S., the authors find that fully disconnecting from the grid with a PV-battery system is impractical for most residential customers without also having dispatchable backup generation. In addition, the authors estimate how the economics of behind-the-meter PV-battery systems may change if the costs of PV systems continue to fall.

The authors conclude that adding distributed PV-battery systems as a means to offset, but not entirely supplant, grid-supplied electricity is technically and economically practical. However, disconnecting from the grid by means of a PV-battery system would be relatively expensive and technically challenging. Therefore, these distributed systems would most likely augment rather than displace the electrical grid in the foreseeable future.

The article, “The practicality of distributed PV-battery systems to reduce household grid reliance,” is authored by Brattle Principal Philip Hanser, Associate Roger Lueken, Senior Research Analyst Will Gorman, and Research Analyst James Mashal. The article is available for purchase here.

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