As more households install rooftop solar panels, a growing question is how to best use the extra power they generate. One option is to send it back to the grid, but with millions of homes doing this, the grid can become overloaded.
Another problem with sending it to the grid is that the feed-in tariff – how much you’re paid for it – is a good deal lower than the retail price – how much you pay when you need to buy it back.
Lead author of a new study in Australia, UniSA researcher Dr Kevin Wang, explains: ‘Under current conditions in Victoria, the feed-in tariff is less than 5 cents per kilowatt hour, while the retail price is around 28 cents. Selling surplus PV energy directly to neighbours at a mutually agreed price in between can be more profitable for solar householders and still cheaper for buyers.’
The research looked a combination of two alternatives: storing energy in batteries and share it directly with neighbours through peer-to-peer (P2P) energy trading.
The study explored how these options affect both the technical and financial side of home energy use. Researchers modeled four different setups for a household with a 10 kW solar system:
- Peer-to-grid (P2G): exporting extra solar to the grid.
- P2G with batteries: storing solar first, then sending any leftovers to the grid.
- Peer-to-peer (P2P): sharing excess power directly with three nearby consumers.
- P2P with batteries: combining storage with local energy sharing.
By analysing a full year of solar and electricity data, it was found that both batteries and P2P sharing help homeowners (called ‘prosumers’ since they produce and consume energy) use more of their own solar and rely less on the grid.
However, there was a trade-off: when prosumers used batteries, they had less leftover energy to share with neighbours, which meant the neighbours ended up buying more grid power.
Simply adding batteries to a grid-connected solar system didn’t pay off financially because of the high upfront cost, but when combined with P2P trading, the picture changed.
At a sharing price of $0.20 per kWh, a prosumer could achieve positive returns, with the highest long-term profit reaching about $4,929 when using a 10 kWh battery. The shortest payback period observed was 12 years for a system with a 10 kW solar array and a 7.5 kWh battery.
The study also showed that bigger batteries don’t always mean better results. Once capacity passed about 12.5 kWh, the extra storage became underused. Sensitivity tests confirmed that lower equipment costs, higher energy-sharing prices or favorable financing conditions could make battery investments more appealing in the future.
Dr Wang said: ‘Our modelling revealed that under current conditions, P2P energy sharing coupled with a 10kWh battery could deliver the highest return – $4929 – for solar owners over 20 years.
‘In contrast, all peer-to-grid scenarios resulted in negative returns over the same period due to low feed-in tariffs and high battery costs.
‘Battery size proved critical. Systems with oversized batteries saw returns diminish due to higher capital and maintenance costs and reduced surplus energy.’
Co-author Professor Mark Luther added: ‘Our analysis shows that if P2P energy sharing prices are set between the feed-in tariff and retail rates, both sellers and buyers can come out ahead. But market rules and technical systems need to support these transactions at scale..
The full report can be read here.
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