integrated

1. Profit model assumption of terminal household storage products

In the economic analysis of household storage, we will analyze three kinds of products: photovoltaic, energy storage and optical storage. In general, the benefits of photovoltaic home energy storage come from two sources: electricity generation or discharge for saving electricity bills; Excess electricity is sold to the grid for electricity. The following four conditions can realize electricity savings, and earn electricity:

A: Home electricity bills are higher than on-grid bills, so the most economical way for consumers to use PV/energy storage is to offset all electricity generated by the bill. In China, for example, the average household electricity consumption in 2020 will be 0.51 yuan /kWh, while the feed-in price after subsidies will be 0.41 yuan /kWh.

B: There is a time mismatch between photovoltaic power generation and electricity load, which cannot be used for self-use. The photovoltaic power output is mainly concentrated at noon, while the peak power consumption on the load side is concentrated between 8-10 in the morning and 6-10 in the evening. The mismatch between power generation and power consumption will result in that even if the photovoltaic power output is less than the domestic electricity consumption, it may not be able to save all the electricity by itself.

C: Valley-hour electricity price generally occurs from evening to morning (when electricity demand is low and electricity price is low). After energy storage charging, the first peak discharge has the greatest economic benefit, and the second charge (if there is no photovoltaic) will occur in normal charging.

D: Photovoltaic power generation and energy storage may overflow. When household electricity consumption is not high, energy storage is used to earn electricity online.

Considering the above actual situation, the operation mode and profit model of photovoltaic, energy storage and optical storage integrated products can be obtained.

A: From the perspective of independent photovoltaics, after photovoltaic power generation, part of the daytime can be used for household self-use. However, when photovoltaic power generation occurs at noon or electricity demand is low in the morning, the electricity demand is greater than the photovoltaic power generation, so more electricity is connected to the Internet. Considering that if the household electricity demand is low, the photovoltaic power consumption will be greater than the household electricity consumption, so the excess part is also used to earn electricity online.

B: The independent storage energy is charged twice a day, namely once for normal charging and once for hourly electricity price. When the peak electricity consumption is greater than the discharged electricity, the energy storage discharge is used for peak discharge to realize the arbitrage of the peak-valley price difference. When the discharged electricity is greater than the peak electricity consumption but less than the domestic electricity consumption, the energy storage will be used for normal discharge. When the discharge quantity is greater than the domestic electricity consumption, if there is arbitrage space (the charging price is less than the feed-in price), it can be used for online arbitrage.

C: In the optical storage machine, photovoltaic power generation is used for self-use and charging. According to the household electricity consumption and discharge quantity, choose peak discharge, normal discharge or earn electricity on the Internet.

Based on the above household storage, operation and profit model, we make the following assumptions: engineering data: the optical storage scale is 7kW+14kWh respectively, the operation is 20 years, the photovoltaic utilization hours are 1500 hours, the energy storage life is 7,000 cycles, two charging and two discharging every day, and the second charging and discharging cycle is 80%. The spontaneous self-use ratio of photovoltaics without energy storage is 50%; Light storage has a body of self-consumption capacity of 85%. User investment data (user purchase amount of optical storage): the United States photovoltaic comprehensive unit investment of $1.54 /W, energy storage comprehensive unit investment of $0.84 /Wh, optical storage integrated unit investment of $1.19 /Wh; In Germany, the comprehensive unit investment of photovoltaic is $1.65 /W, the comprehensive unit investment of energy storage is $0.84 /Wh, and the comprehensive unit investment of optical storage is $1.23 /Wh. In Italy, the photovoltaic integrated unit investment is $1.67 /W, the energy storage integrated unit investment is $0.86 /Wh, and the optical storage integrated unit investment is $1.25 /Wh. In France, the integrated unit investment of photovoltaics is $1.57 /W, the integrated unit investment of energy storage is $0.8 /Wh, and the integrated unit investment of optical storage is $1.17 /Wh. In the UK, the integrated unit investment of photovoltaic is $1.49 /W, the integrated unit investment of energy storage is $0.76 /Wh, and the integrated unit investment of optical storage is $1.12 /Wh.

Electricity data: The average electricity consumption per person for a family of three is 371kWh/ month in 2021. Electricity data is assumed to be 2021 Prices based on Global Petrol Prices data, with the US electricity price set at $0.16 /kWh; The price of electricity is $0.33 per kWh in Germany, $0.24 per kWh in Italy, $0.18 per kWh in France and $0.32 per kWh in the UK. The peak-valley price difference for household electricity consumption is 50%. Maintenance cost: Annual maintenance cost is 0.6% of the total investment, and battery replacement cost is 30% of the battery price.

2. Economy and sensitivity analysis of terminal household storage products

Based on the above model, through our calculation, European countries have the highest economy, and the optical storage all-in-one machine products have the highest economy. From the perspective of the internal rate of return of each product, optical storage integrated machine > photovoltaic > energy storage. Without PV, energy storage is basically not economical. Its income comes from peak discharge, but it needs valley charging, so there is limited arbitrage space for peak-valley price differences alone. Compared with the photovoltaic, the all-in-one optical storage machine can improve the self-use rate of photovoltaic power generation and the overall absorption rate through energy storage, so as to have relatively higher available power generation. While compared with energy storage, the charging can come from photovoltaic power generation, reducing part of the charging cost. From the perspective of the internal rate of return of each country, the rate of return of Europe and the United States is higher, and the economy of optical storage all-in-one machines is higher. From the perspective of the recycling cycle, the recycling cycle of the US optical storage all-in-one machine is 7 years, and the recycling cycle of Germany, Italy, France, and the UK is 4-7 years.

Taking the United States as an example, it is estimated that the total cost decreases by 5% and the IRR increases by about 1.7pct when other conditions remain unchanged, and the marginal effect is enhanced with the increase of the cost reduction range. The decrease in total cost can benefit the optical storage system in two aspects: the first is the decrease in initial investment, and the second is the decrease in maintenance cost and battery replacement costs. 

The reduction of the total cost can be said to be the most direct way to increase IRR and improve the economy of the optical storage systems. Some regional policies in the United States give cash subsidies to users who purchase optical storage systems. For example, Arizona declared that within 3 years from May 1, 2018, With subsidies of up to $1,800 available to customers who purchase and install qualified battery storage systems and participate in the SRP battery research program, the government subsidy effectively reduces the total cost and improves the economy. From the perspective of the influence of IRR, government subsidies will greatly improve the economy of household storage systems, 

thus increasing the purchasing enthusiasm of residential users. In addition, we can see that the decrease in cost (other conditions remain unchanged) has a law of marginal effect enhancement on the increased effect of IRR. The decrease in cost ranges from 0% to 5%, and the increase in IRR is 1.7pct; the decrease in cost ranges from 20% to 25%, and the increase in IRR is 3.8pct. IRR is the discount rate at which the initial investment is equal to the present value of future cash flows, and the discount effect of the discount rate on future cash flows decreases at the edge. 

Therefore, although the reduction amount is the same, the lower the initial investment, the greater the increase in IRR. In the future, the cost will gradually decrease, the improvement of IRR will be more obvious, and the development of household reserves will be more rapidly driven by the economy. All other things being equal, electricity price goes up by $0.1 /kWh and IRR goes up by about 1pct. The effect of electricity price on IRR is actually to increase the income of electricity saving of the optical storage system. The higher the electricity price, the higher the electricity cost of the consumer, and the corresponding income of the optical storage system. The effect is linear. The increase of electricity bill will increase all income in a fixed proportion, and the income structure of household savings will not change.

Other conditions remain unchanged,

 per capita electricity consumption increases by 50kWh/ month, IRR increases by about 0.9pct, and the marginal effect will be limited by the scale of the optical storage system. The increase in per capita electricity consumption is the replacement space for domestic electricity by the optical storage system, which can be divided into two parts: first, the original on-grid electricity is used for domestic electricity;

 second, 

the increase in the original peak electricity demand will increase the income. However, this effect will eventually be limited by the scale of the optical storage system. If the household electricity consumption reaches a certain amount, the profit of the optical storage system has been maximized (the electricity replacement in peak times is full, and the electricity replacement in ordinary times is also full). At this time, increasing the per capita electricity consumption can no longer improve the rate of return. In the future, with the increasing per capita electricity consumption, the scale of the corresponding optical storage system will also increase due to the pursuit of economy. Other conditions remain unchanged, peak-valley spread increases by 5%, and IRR increases by about 0.7pct. The impact of peak-valley spread on IRR is mainly to increase the benefits of energy storage, which is specifically reflected in the reduction of try-time charging cost and the increase of peak-time discharge benefits. The effect is linear, with no structural changes.

The core of the development of household storage systems lies in the rate of return. According to the above model, we can get that the core influencing factors of the rate of return of optical storage system are 1) residential electricity price; 2) Power peak-valley spread; 3) Electricity consumption per capita; 4) Cost of the household storage system. Among them, the sensitivity of household storage system cost and residential electricity price is higher.