Residential Battery Systems and the Best Time to Invest A case study of Hawaii
Aida Arik ()
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Aida Arik: University of Hawaii at MÄ noa
No 2017-9, Working Papers from University of Hawaii Economic Research Organization, University of Hawaii at Manoa
Battery storage is a complementary technology to intermittent renewable energy sources. In particular, it pairs well with solar photovoltaic (PV) systems to capture excess solar generation during daylight hours and to draw energy from it when needed. Technological advancements and rapidly declining costs have made batteries more economically feasible for households, especially in the state of Hawaiâ€˜i, which faces the highest cost of electricity in the U.S. With the sunset of net energy metering (NEM) in 2015, and technical limitations from interconnecting additional PV systems capable of exporting energy to the grid, non-exportable PV systems are increasingly a viable option for residential customers in Hawaiâ€˜i. This paper analyzes whether the installation of a PV plus battery system is economically compensatory for households on Oahu, with the power grid as a back-up option. Given the importance of state and federal tax incentives in reducing capital costs, this paper compares household savings in the decision to invest now or later, given that the federal tax credit of 30% is set to decline in 2020 and expire by 2022. Installing a PV plus battery system in 2019 could increase net savings by 17-32% in Oahu compared to installing the same system in 2017.
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