Economic Viability of PV-BESS Systems under Time-of-Use Pricing and Price Caps: A Multi-Location Study in Vietnam

Loan Thi Do ()
Additional contact information
Loan Thi Do: Faculty of Energy and Industrial Management, Electric Power University, Hanoi, Vietnam.

International Journal of Energy Economics and Policy, 2026, vol. 16, issue 4, 69-77

Abstract: Utility-scale photovoltaic (PV) systems are increasingly integrated with battery energy storage systems (BESS) to mitigate curtailment and enhance renewable energy integration. However, the economic viability of photovoltaic-battery energy storage systems (PV-BESS) remains highly uncertain under current electricity pricing mechanisms, particularly in power systems characterized by transmission constraints and regulated price caps. This study develops an integrated techno-economic framework to evaluate the performance of PV-BESS systems under time-of-use (TOU) pricing. The framework combines PV generation and curtailment modeling, rule-based BESS dispatch, and financial evaluation to capture the interactions between system operation, pricing structures, and investment outcomes. The analysis is applied to three representative utility-scale PV plants in Vietnam, capturing variations in solar resource conditions and transmission congestion levels. The results show that transmission constraints strongly affect economic performance, significantly widening the financial viability gap as congestion increases. While TOU pricing improves temporal price signals, it remains insufficient to ensure investment viability under regulated price caps. Notably, stronger TOU price differentials may reduce total revenue under capped peak prices, thereby increasing the required capacity-based compensation. These findings highlight structural limitations of energy-based pricing mechanisms in supporting storage deployment in constrained power systems. Additional compensation mechanisms, such as capacity payments, are required to enable economically sustainable PV-BESS deployment and enhance renewable energy integration.

Keywords: Photovoltaic systems; Battery energy storage; Time-of-use pricing; Renewable integration; Curtailment; Financial viability (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://econjournals.com/index.php/ijeep/article/download/24099/10268 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:v:16:y:2026:i:4:id:24099

Ordering information: This journal article can be ordered from
https://econjournals.com/index.php/ijeep

DOI: 10.32479/ijeep.24099

Access Statistics for this article

More articles in International Journal of Energy Economics and Policy from International Journal of Energy Economics and Policy
Bibliographic data for series maintained by Monica Sinhat ().