Private vs. public value of U.S. residential battery storage operated for solar self-consumption

Compensation structures for residential solar are evolving toward a model that incentivizes using battery storage to maximize solar self-consumption. Using metered data from 1,800 residential customers across six U.S. utilities, we show that batteries operated solely in this manner provide customer bill savings up to $20–30 per kWh of storage capacity annually, but in some cases may provide virtually no grid value. The value gap relative to market-based dispatch is highly consistent across customers and will become more severe over time, insofar as increased renewable energy penetration leads to more volatile wholesale prices. This inefficiency stems from both a misalignment in the timing of battery dispatch relative to market value, and also because batteries used solely for solar self-consumption tend to stand idle on peak days. We show that incentivizing storage customers to respond to market prices, particularly on peak days, would enhance both private and public value. Unconstrained grid discharging increases exports to distribution networks, but 50–70% of the potential market value could be achieved without materially degrading solar self-consumption levels or increasing local grid stress.

An open-access version of this article published in iScience can be downloaded here. A brief summary of this paper can be viewed here. 

A webinar discussing the results of this study was recorded on August 4, 2022, and can be viewed here.