The Economic Feasibility of Residential Energy Storage Combined with PV Panels: The Role of Subsidies in Italy

Federica Cucchiella, Idiano D’Adamo and Massimo Gastaldi
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Federica Cucchiella: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy
Idiano D’Adamo: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy
Massimo Gastaldi: Department of Industrial and Information Engineering and Economics, University of L’Aquila, Via G. Gronchi 18, 67100 L’Aquila, Italy

Energies, 2017, vol. 10, issue 9, 1-18

Abstract: A solar photovoltaic system produces electricity by converting energy from the sun. By the end of 2016, the global installed solar photovoltaic capacity reached 305 GW. Its growth is impressive in the last years; in fact, it was only equal to 41 GW in 2010. However, Europe has installed only 6.9 GW in 2016 (?1.7 GW in comparison to previous year) and this annual power installed is equal to 9% of global one in according to data released by Solar Power Europe. The profitability of PV systems in mature markets depends on the harmonization between demanded energy and produced one residential energy storage when combined with photovoltaic panels is able to increase the share of self-consumption. This work proposes a mathematical model, in which a Discounted Cash Flow analysis is conducted to evaluate the financial feasibility of photovoltaic-integrated lead acid battery systems in Italy. The indicator used is Net Present Value. Furthermore, a break-even point analysis, in terms of an increase of self-consumption, is conducted. The residential sector is investigated and energy storage system investment is incentivized by fiscal deduction and regional subsidies. The analysis provides several case studies, determined by combinations of the following variables: photovoltaic plant size, battery capacity, the increase of the share of self-consumption, and the useful lifetime of energy storage system. The same case studies are proposed also in four alternative scenarios, where is the modified the structure of subsidies. Results confirm that the profitability can be reached in presence of subsidies.

Keywords: economic analysis; photovoltaic; storage; subsidies (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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