Optimizing Size and Economic Feasibility Assessment of Photovoltaic and Energy Storage Setup in Residential Applications

Battery energy storage systems (BESSs) are essential in enhancing self-sufficiency, sustainability, and delivering flexibility services. However, adoption of this technology in residential applications is constrained, predominantly due to its suboptimal economic performance. A proper selection of design parameters and optimal resource utilization can significantly enhance performance and establish economic feasibility. This research introduces a photovoltaic (PV)-BESS optimization framework, formulated to ascertain optimal infrastructure sizing, and maximize economic performance. The proposed tool considers various elements, such as energy storage state of health status, renewable profiles, residential load profiles, and prevailing energy market conditions. A novel rule-based, non-linear optimization method is developed, with a focus on maximizing revenue while considering energy storage (ES) degradation to project more accurate and realistic scenarios and payback periods. Employing the Estonian energy market as an illustrative case study, the model probes the potential of integrating ES and PV technology in North European residences. The model achieved the shortest payback period of five years in our case study, underscoring the emerging potential of such technologies in behind-the-meter applications.