Photovoltaics with accumulation: is it worthwhile now?

How much does it cost and how much does it save to install a small photovoltaic system equipped with a battery storage system that maximizes self-consumption? We tried to understand this with some economic simulations based on current prices. Finding out that, thanks to tax deductions, the budget is already attractive.

The interest in storage systems to be combined with domestic photovoltaics in Italy in recent times is very high. No wonder: with electricity prices being among the highest in Europe and with the end of the feed-in tariff of the Energy Bill, in our country the watchword in PV, now more than ever, is maximize self-consumption  (see also our  Technical Special on PV and self-consumption ).

As we told (,  FV and storage systems: what is being done in Italy? ), Some of the batteries matched to the plant has already started to install them, but the market is still basically still  awaiting the regulatory provisions  of the Authority for Energy. Regulations that are about to arrive: according to some rumors  may be ready already at the end of the month .It is therefore time to understand if, with current prices, it is already convenient to install a small storage system combined with photovoltaics. We have built hypothetical business plans, discovering that thanks to the 50% tax deduction already now installing a small PV plant with storage seems like  a good deal . There is talk of times of return on investment of about 9-10 years and an internal rate of 8-10%.

But let’s take a closer look at the economic simulations, for which we have availed ourselves of the precious advice of the engineer Rolando Roberto and his colleagues from ATER, the association of renewable technicians. There are two cases that we have hypothesized: the first refers to a house inhabited by 3 people with annual consumption such as to be able to assume a PV plant of  3 kWp and a storage capacity of 5.5 kWh  effective; the second hypothesis was made by doubling consumption, thus installing a 6 kWp PV generator  with an actual 11 kWh storage tank  . In both cases for the productivity of the PV we have assumed that the plants are located in Central Italy.

What storage technology are we talking about? “While the prices of lithium batteries are falling, the market is moving using lead-acid products. The best compromise right now seems  like gel batteries  for long life solar applications  ; we used a system equipped with this solution “, explains the engineer Roberto.

The cost? For the 3kWp PV system with 5.5  kWh  battery we have estimated a price, including turnkey and VAT, of  14,200 euros , for the 6 kWp plant  with an accumulation of 11 kWh,  it goes up to  25 thousand euros . An initial cost to which we added the maintenance costs: in our analysis we have foreseen, in the 20 years, two replacements  of the battery packs and a replacement of the inverter, assuming for the second substitution a price reduction of at least 30%.

The accumulations of our simulations are sized so as to  increase self-consumption from 35 to about 90% , we hypothesized that the plants have the possibility to carry out the exchange on the spot and that the cost of electricity from the network increases by 4% year (average increase of the last years). The sizing was designed by analyzing the consumption profile in the various months of the year and by the time slots in which the user spends more. For simplification reasons we have considered a typical day without taking into account the midweek or holiday variations.

“We always remember – says the engineer Rolando Roberto – that  the user who will most agree to install such a plant will be the  one that concentrates consumption mainly in the evening . Keep in mind also future purchases like motorcycles or electric cars: you can hardly recharge them during the day under the shelter of your home “.

And we come to the results (which you find summarized with all the details in the attached pdf below). As mentioned, even with the current battery prices, decidedly high and for which a drastic drop is expected in the next few years,  the economic balance seems acceptable, provided you can access the tax deductions  of 50%  (which will fall from 2015 to 40 % and from 2016 to 36%).

In our hypothesis the domestic 3 kW plant with accumulation repays in 10 years and, over the 20 years, there is  a saving, net of expenses, of over 14,600 euros , with a return on the annual investment of 5 , 2%, an IRR of 8% and a NPV at the rate of 2%, which reaches € 19,800.

Even  more convenient is the case of the 6 kW  where, compared to IRR values ​​of 10% and ROI of 6.3%, we have a return in about 9 years, a net saving of over 31,500 euros and a VAN of 38,600 euros.

So, quite good numbers, are we on the eve of a boom? The potential is there, but the times are perhaps still not very mature. “The   economic convenience of storage systems  is not yet such as to exceed that of traditional photovoltaic systems . For the moment it is a niche market, but that presents interesting potential “, commented after examining our simulations the engineer Francesco Groppi, professor of technical systems at the Polytechnic of Milan.

“Prices are  evolving , technologies also”, comments Roberto. At the moment there are two aspects that hamper the development of the sector: the lack of an adequate incentive regime, given the still high costs, and the lack of a streamlined regulation: we will see if in the final version of the AEEG legislation there will be simplifications compared to the texts presented in the consultations.