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Understanding the Value of Residential Solar PV and Batteries

Energy transition

The client was seeking support to understand the value of potential residential customer Low Carbon Technology (LCT) offerings, specifically whether they should enter or expand their residential battery offerings for customers with and without solar PV.

The client background

The client is a major European energy retailer and is seeking to develop propositions to attract and retain customers. The client had identified residential battery storage as a potential customer offering across their European retail businesses. They were interested in whether a residential battery offering provided value for money for customers.

The key client question(s)

The client was seeking to understand the value of different customer revenue streams in four countries: France, UK, Belgium, and Italy

  • Considering a single client type: a residential family of four with electric space and water heating, no EV, and a 7kWh battery and 6kWp PV system (where applicable)
  • Using a single tariff for each country: chosen by the client or its subsidiaries, consisting of a simple day and night time-of-use tariff
  • For customers with and without solar PV and where the battery was used for simple or advanced optimisation
  • Considering a range of six revenue streams (eg. maximising self-consumption, tariff arbitrage, etc.)

Our solution

We modelled the customer value in terms of payback, annual revenue, and revenue after 10 years considering:

  • Which revenue streams were available to the batteries in each market, and the quantum of each value stream;
  • Demand profiles for the modelled customers;
  • Market prices (eg. wholesale, retail, flexibility prices)
  • Typical capabilities for solar PV and residential battery storage systems (such as generation profiles and storage and discharge capabilities) and the prices of these systems.

The LCP Delta difference

We informed the client of the customer value of residential batteries in each of their core markets, which fed into their commercial strategy.  We also identified further opportunities for the client to explore where additional customer value could be achieved.

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