Effects of electricity tariffs on optimal battery energy storage sizing in residential PV/storage systems

Abstract

In this article, the problem of sizing and dispatch scheduling of battery energy storage in a grid-connected photovoltaic system with battery storage backup (PV/Storage system) is addressed. The goal is to minimize the costs of purchasing electricity from the grid and the costs associated with battery aging (cost of battery degradation is modeled in daily dispatching). Grid-connected photovoltaic system assumed to be available in the typical residential consumer considered in our study. Electricity generated from the PV is used to charge the battery and supply the house's demand. If the consumer is net metered, any exceeding can be sold back to the grid. PV/Storage system can reduce costs of purchasing electricity from the grid through peak shaving and load shifting. The rate structure determines which application is being used. Load shifting application is implemented when time-of-use pricing is in effect and peak shaving application is beneficial when the consumers are charged for peak of the demand. Optimal sizing and dispatch scheduling of the battery for both pricing structures are determined and effectiveness of each application in reducing costs is evaluated. Mixed Integer Programming (MIP) is implemented to solve the optimization problem.