Economic and Technical Aspects of Flexible Storage Photovoltaic Systems in Europe

Solar energy has an increasing role in the global energy mix. The need for flexible storage photovoltaic systems and energy storage in electricity networks is becoming increasingly important as more generating capacity uses solar and wind energy. This paper is a study on the economic questions related to flexible storage photovoltaic systems of household size in 2018. The aim is to clarify whether it is possible in the European Union to achieve a payback of the costs of flexible storage photovoltaic system investments for residential customers considering the technology-specific storage aspects prevalent in 2018. We studied seven different flexible storage photovoltaic investments with different battery technologies in Germany, France, Italy, and Spain because, in Europe, these countries have a prominent role with regard to the spread of photovoltaic technology. These investment alternatives are studied with the help of economic indicators for the different cases of the selected countries. At the end of our paper we come to the conclusion that an investment of a flexible storage photovoltaic (PV) system with Olivine-type-LiFePO4, Lithium-Ion, Vented lead-acid battery (OPzS), Sealed lead-acid battery (OPzV), and Aqueous Hybrid Ion (AHI) batteries can have a positive net present value due to the high electricity prices in Germany and in Spain. The most cost-effective technology was the Olivine-type-LiFePO4 and the Lithium-Ion at the time of the study. We suggest the provision of governmental support and uniform European modifications to the regulatory framework, especially concerning grid fees and tariffs, which would be necessary in the beginning to help to introduce these flexible storage PV systems to the market.


Change in the Spread of Photovoltaic (PV) Technology in Europe
The global energy demand is increasing day by day, and the shift to a sustainable, low-carbon economy will require innovation and the deployment of a range of low-carbon technologies for providing energy and other services [1,2].Today, the greenhouse effect and global warming are the most important hazards for the Earth's future.One possible optimal solution to stop their adverse influences on human life is using renewable energy sources, since they are green, clean, environment-friendly, and sustainable [3,4].Global warming has pushed the whole energy sector towards low-carbon energy resources, and photovoltaic (PV) sources have a key role in this transition [5][6][7].PV technology is an essential pillar for transforming our energy systems into one based on renewable and sustainable energy sources [8].The share of renewable electricity production represented 24.5% of all electricity produced globally in 2016, of which PV technology accounted for 1.5%.PV systems have largely penetrated the global energy market, especially in Europe.In 2016, the global solar PV capacity was 303 GW, with the largest proportions being the European Union's 106 GW, China's 77.4 GW, Japan's 42.8 GW, and the USA's 40.9 GW [9][10][11].Today, in many emerging markets, PV technology is considered a cost-competitive source for increasing electricity production and for providing energy access.Nonetheless, markets in most locations continue to be driven largely by regulations or government incentives [11][12][13].The European Union became the first region to pass the 100 GW milestone in 2016 [11,14].Germany, France, Italy, and Spain have a prominent role in the spread of PV technology in Europe.Based on reference data, by 2050, the net PV production capacity in the EU will be +197.3GW higher than in 2015 [15] (Figure 1).towards low-carbon energy resources, and photovoltaic (PV) sources have a key role in this transition [5][6][7].
PV technology is an essential pillar for transforming our energy systems into one based on renewable and sustainable energy sources [8].The share of renewable electricity production represented 24.5% of all electricity produced globally in 2016, of which PV technology accounted for 1.5%.PV systems have largely penetrated the global energy market, especially in Europe.In 2016, the global solar PV capacity was 303 GW, with the largest proportions being the European Union's 106 GW, China's 77.4 GW, Japan's 42.8 GW, and the USA's 40.9 GW [9][10][11].Today, in many emerging markets, PV technology is considered a cost-competitive source for increasing electricity production and for providing energy access.Nonetheless, markets in most locations continue to be driven largely by regulations or government incentives [11][12][13].The European Union became the first region to pass the 100 GW milestone in 2016 [11,14].Germany, France, Italy, and Spain have a prominent role in the spread of PV technology in Europe.Based on reference data, by 2050, the net PV production capacity in the EU will be +197.3GW higher than in 2015 [15] (Figure 1).

Change in the Spread of Energy Storage
Energy storage is one of several potentially important technologies enabling and supporting the large-scale deployment of renewable energy, particularly variable renewables such as wind and PV energy [16,17].The most important uses of energy storage are [18].

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renewables capacity firming; As shown in Figure 1 the need for energy storage in electricity networks is becoming increasingly important, as more and more generating capacity uses renewable energy sources that are intrinsically intermittent, while electricity systems need to be constantly in balance.The key to addressing the variability and uncertainty of variable renewable electricity integration is the increasing of the overall flexibility in the power system.Energy storage can provide a variety of flexibility services, including provision of operating reserves and shifting energy over time to better match generation and load [16,17,[19][20][21][22][23].Storage can provide both downward and upward flexibility, storing energy either when there is generation surplus or lower demand and discharging in the opposite case [24][25][26].With respect to applications for the daily balancing of demand and supply in the electricity system, large-scale storage options such as pumped hydro storage, molten salt thermal storage, flywheel, compressed air storage, or battery systems are of main interest [27][28][29][30][31].
The global stationary and grid-connected energy storage capacity in 2016 totaled an estimated 156.4 GW, with pumped storage hydropower accounting for the vast majority (150 GW).The rest of this sector focuses on energy storage other than pumped storage.Around 0.8 GW of new advanced energy storage capacity became operational in 2016, bringing the year-end capacity total to an estimated 6.4 GW.Most of the growth was in electrochemical (battery) storage, which increased by 0.6 GW for a total of 1.7 GW.Lithium-ion batteries comprised the majority of new capacity installed [15,[32][33][34].The rechargeable battery is one of the most widely used electrical energy storage technologies in daily life and industry [35].Electrochemical (battery) storage is attractive because it is easy to deploy, already economical, compact, and provides virtually instant response both to the input from the battery and the output from the network to the battery [36].
In the future, energy storage will play an increasingly important role in enabling the effective integration of photovoltaic energy and unlocking the benefits of local generation and a resilient, green energy supply.Storage and transmission have a synergistic effect on decreasing the average CO 2 emissions and the electricity price and it allows the achievement of more challenging targets for CO 2 emissions at a lower cost.Grid operators all over the world must manage the variable PV energy generation more efficiently.Due to the current EU project development trends new flexible energy storage systems have mainly been concentrated in the highly developed economic regions.Without governmental support it is difficult to successfully implement energy storage system projects because despite the rapidly falling costs these investments are still expensive.This economic aspect will be improved greatly by the development of electrochemical storage systems in the future because according to forecasts the installation costs of battery storage systems will be significantly reduced by 2030 (Figure 2) [24,27,[37][38][39].The Bloomberg New Energy Finance study showed in the case of household size that the median flexible storage photovoltaic system payback period is more than 25 years in 2018 [40] (Figure 3).An important question is whether it is possible in the European Union to achieve a payback of the costs of flexible storage photovoltaic system investments for residential customers considering the technology-specific storage aspects prevalent in 2018.

Methods and Details of the Technical and Economic Assessment
Our work deals with the economic questions of grid-tied PV-electrochemical (battery) storage or flexible storage photovoltaic systems of household size in 2018.These solutions can be described as off-grid-grid-tied systems with extra battery storage or utility backup power, which increases the security of the energy supply (Figure 4).

Methods and Details of the Technical and Economic Assessment
Our work deals with the economic questions of grid-tied PV-electrochemical (battery) storage or flexible storage photovoltaic systems of household size in 2018.These solutions can be described as off-grid-grid-tied systems with extra battery storage or utility backup power, which increases the security of the energy supply (Figure 4).

Methods and Details of the Technical and Economic Assessment
Our work deals with the economic questions of grid-tied PV-electrochemical (battery) storage or flexible storage photovoltaic systems of household size in 2018.These solutions can be described as off-grid-grid-tied systems with extra battery storage or utility backup power, which increases the security of the energy supply (Figure 4).We studied seven different flexible storage photovoltaic investments with different battery technologies in Germany, France, Italy and Spain because in Europe these countries have a prominent role with regard to the spread of photovoltaic technology [15].

Meteorological Background
The price of electricity delivery and the intensity of solar radiation vary significantly from country to country resulting in significant differences in assessing the cost efficiency of creating such systems.Table 1 presents the global irradiation conditions of various countries together with the electric energy that could be produced by a 1 kW PV system.Environmental factors, such as changes in the temperature and the geographic specific irradiation, affect the output power of a PV system [42].For PV energy simulations, we used the Photovoltaic Geographical Information System (PVGIS).Data from the PVGIS included real climatic data series of several decades [43].These data were used for economic calculations as well.Cities where the global horizontal irradiation (GHI) is higher than the average value and real systems work with online data services were selected for calculations (Table 1).These databases are used to combine PV with battery system sizing in combination too [44].We studied seven different flexible storage photovoltaic investments with different battery technologies in Germany, France, Italy and Spain because in Europe these countries have a prominent role with regard to the spread of photovoltaic technology [15].

Meteorological Background
The price of electricity delivery and the intensity of solar radiation vary significantly from country to country resulting in significant differences in assessing the cost efficiency of creating such systems.Table 1 presents the global irradiation conditions of various countries together with the electric energy that could be produced by a 1 kW PV system.Environmental factors, such as changes in the temperature and the geographic specific irradiation, affect the output power of a PV system [42].For PV energy simulations, we used the Photovoltaic Geographical Information System (PVGIS).Data from the PVGIS included real climatic data series of several decades [43].These data were used for economic calculations as well.Cities where the global horizontal irradiation (GHI) is higher than the average value and real systems work with online data services were selected for calculations (Table 1).These databases are used to combine PV with battery system sizing in combination too [44].

Technological Background
It is possible for residential customers in the analyzed countries to input extra energy produced by PV systems into the national electricity network in the framework of household size [50].
The decrease of annual performance in the case of monocrystalline modules (m-Si modules) and polycrystalline modules (p-Si modules) was determined to be around 0.5%, which is a generally accepted value [51].
Battery technologies are developing rapidly with energy density and cheaper materials in the main focus.In order to achieve higher density, new material structures can be utilized: graphene as a carbon allotrope [52], Toyota's lithium sulfide solid-state battery [53], gold nanowiring of batteries [54], 3D reconstructed anodes and cathodes in lithium batteries [55], or just new architecture of Li-ion batteries [56].The last three types are connected to 3D printing, which shows that combining materials science with new technologies can also lead to new inventions.However, these are not marketed yet, so older solutions have to be used in combination with PV systems.
The following PV battery technologies were analyzed because they are easily and quickly accessible to the public [57]: The temperature of the batteries was kept ideal with a 10-12-h discharge.An interval of 30 years was studied, mainly due to the longest Olivine-type-LiFePO 4 battery life (Table 2).Four-person households with the average energy consumptions of the respective countries were examined.During the studied time period maintenance work needs to be carried out at the end of the battery life and also the inverters need to be replaced every 10 years.For the calculations a crystalline, 5 kW nominal power household PV system was used together with an SMA Sunny Boy 5000 tl PV inverter (SMA Solar Technology AG, Niestetal, Germany) and an SMA Sunny Island 4.4 M battery inverter (SMA Solar Technology AG, Niestetal, Germany) because of their reliability.For the calculations a battery with an 8 kWh nominal energy capacity was chosen, which is considered above-average in size (Figure 5) [58].It was assumed that new batteries will have to be purchased after the average battery lifespan based on the global horizontal irradiation (GHI) and electric energy production in the studied countries (Tables 1 and 2) an interval of 30 years based on the seasonal features.The calculations included several system losses (Table 2), 180 • orientation (azimuth), and a tilt angle of 35 • .Table 3 shows the technical features considered.
The following equipment, materials, and services are required for a flexible storage PV system: In this study, the same flexible storage PV system costs were used for calculations for all the countries (Germany, Italy, Spain, and France).However, different technologies have different investment costs.The difference between the minimum and the maximum investment cost can even reach 8000 Euros.The LiFePO 4 battery technology has the highest investment cost and the AGM battery technology has the lowest.The investment costs for a complete flexible storage PV system are shown in Figure 5.In this study, the same flexible storage PV system costs were used for calculations for all the countries (Germany, Italy, Spain, and France).However, different technologies have different investment costs.The difference between the minimum and the maximum investment cost can even reach 8000 Euros.The LiFePO4 battery technology has the highest investment cost and the AGM battery technology has the lowest.The investment costs for a complete flexible storage PV system are shown in Figure 5.The energy management was analyzed as follows: • We determined the monthly total energy data.

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For our calculations we assumed 50% direct PV energy (as daytime use) usage based on the average electricity consumption of households (Table 3) with smart regulation.

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For the rest of the energy consumption, the battery energy usage (as evening use) was calculated considering the Depth of discharge (DOD) and the system losses.

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We assumed that if the flexible storage annual energy production of a PV system is more than the average electricity consumption, and the extra PV energy will result in extra revenue by the delivery price.

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On the other hand, if the PV or battery energy production level is too low, direct energy consumption from the grid is taken into account.
We illustrated the main logic with the energy balance data of an actual flexible storage PV system in Figure 6.
Energies 2018, 11, x 8 of 17 The energy management was analyzed as follows: • We determined the monthly total energy data.

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For our calculations we assumed 50% direct PV energy (as daytime use) usage based on the average electricity consumption of households (Table 3) with smart regulation.

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For the rest of the energy consumption, the battery energy usage (as evening use) was calculated considering the Depth of discharge (DOD) and the system losses.

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We assumed that if the flexible storage annual energy production of a PV system is more than the average electricity consumption, and the extra PV energy will result in extra revenue by the delivery price.

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On the other hand, if the PV or battery energy production level is too low, direct energy consumption from the grid is taken into account.
We illustrated the main logic with the energy balance data of an actual flexible storage PV system in Figure 6.

Economic Background in the Analyzed Countries
For economic calculations dynamic return indicators, such as the net present value (NPV), the profitability index (PI) and the discounted payback period (DPP), were used according to internationally applied methods [85].The current interest rate needed for the calculation of the time value of the dynamic economic indicators was determined based on the 7 May 2018 status of long-term bond yields.
The authors assumed that the delivery price and the household electricity price of electric energy and the maintenance cost have an annual increase equal to the rate of average inflation (2014-2017).For the calculation of long-term income expectations, the yield data of 30-year government bonds were taken into account.
The annual cash flow is calculated as the sum of the household electricity costs saved (daytime and evening use) and the delivery price of the extra electric energy minus the maintenance costs.The time value is taken into account for the delivery price, the household electricity costs saved and the maintenance cost.Here, 100% own capital is calculated for the necessary investment for the systems based on the current market situation [86][87][88][89][90][91][92][93].A positive measure is the Self-Generation Incentive Program (SGIP) in California in the USA, where homeowners who are customers of either Pacific Gas & Electric (PG&E), Southern California Edison (SCE), the Southern California Gas Company, or San Diego Gas & Electric (SDG&E) will be eligible for an incentive as high as $400/kWh battery size, when someone installs a home battery [94,95].In the calculations, gross values were used because this calculation is valid only for households and not for businesses.Table 4 summarizes the bond yield interest rates, delivery price of electric energy and the electricity consumption of an average household in the analyzed countries.In Germany, the Federal Government is currently providing Figure 6.Illustrating the main logic of calculations with energy balance data from an actual flexible storage PV system [84].System informations: PV system power: 14.760 kW; Nominal battery capacity: 9800 Wh; Battery type: Lithium-Ion; Location: Kassel, Germany.

Economic Background in the Analyzed Countries
For economic calculations dynamic return indicators, such as the net present value (NPV), the profitability index (PI) and the discounted payback period (DPP), were used according to internationally applied methods [85].The current interest rate needed for the calculation of the time value of the dynamic economic indicators was determined based on the 7 May 2018 status of long-term bond yields.
The authors assumed that the delivery price and the household electricity price of electric energy and the maintenance cost have an annual increase equal to the rate of average inflation (2014-2017).For the calculation of long-term income expectations, the yield data of 30-year government bonds were taken into account.
The annual cash flow is calculated as the sum of the household electricity costs saved (daytime and evening use) and the delivery price of the extra electric energy minus the maintenance costs.The time value is taken into account for the delivery price, the household electricity costs saved and the maintenance cost.Here, 100% own capital is calculated for the necessary investment for the systems based on the current market situation [86][87][88][89][90][91][92][93].A positive measure is the Self-Generation Incentive Program (SGIP) in California in the USA, where homeowners who are customers of either Pacific Gas & Electric (PG&E), Southern California Edison (SCE), the Southern California Gas Company, or San Diego Gas & Electric (SDG&E) will be eligible for an incentive as high as $400/kWh battery size, when someone installs a home battery [94,95].In the calculations, gross values were used because this calculation is valid only for households and not for businesses.Table 4 summarizes the bond yield interest rates, delivery price of electric energy and the electricity consumption of an average household in the analyzed countries.In Germany, the Federal Government is currently providing funding for the development of energy storage systems.About 200 million Euros have been awarded since 2012 for a total of around 250 projects.The projects benefitting from the funding initiative range from electrochemical technologies in households to MW storage systems.The funding program will run until 2018 [96].

Economic Aspects of the Flexible Storage PV Systems
The necessary replacement of the batteries and the inverters determines the maintenance costs, which are written in Table 4.There are big differences between the maintenance costs: the Olivinetype-LiFePO 4 systems have the minimum value, which is only a quarter of the maintenance costs of the Absorbent Glass Mat (AGM) systems.The reason is mainly the average cycle stability based on depth of discharge (DOD).In the case of daily use AGM batteries should be replaced approx.every two years, while the Olivine-type-LiFePO 4 technology is capable of 30 years of operation.
Besides the electricity delivery price and the bond yield and the inflation rates it is the maintenance cost that has a big influence on the net present value of the investment.Figure 7 shows us the investment indexes of a flexible storage PV system.The best economic environments to build flexible storage PV systems are in Germany and in Spain due to the high electricity prices.Italy and France have negative NPVs within a 30-year period, which means their discounted payback periods (DPP) are longer than 30 years.Own usage was calculated besides selling the electricity.All the studied countries except France have higher electricity prices for households than delivery prices from PV systems.The DPP was not indicated in the case of the AGM and LiFePO 4 flexible PV storage systems in the Figure 7 because these payback periods were longer than 30 years.
In France, the household electricity price is lower than the delivery price of electric energy from PV systems.Consequently, a standard PV system produces more profit than a flexible storage one.In this case the best solution is to sell the electricity rather than use it for own consumption.
The difference between the household electricity price and the delivery price are more than twice in Germany, thus the country could be a good economic environment for flexible storage PV investments.The results show positive NPVs in Germany and in Spain for the following technologies:   The DPP of the Olivine-type-LiFePO 4 and the Li-ion batteries are around 15 years.Li-ion and the Olivine-type-LiFePO 4 batteries have the best NPVs, and these are the most cost-effective technologies among of the studied systems.Building a flexible storage system with these batteries can be profitable in Germany and in Spain within 30 years.OPzS and AHI also have positive NPVs in both countries, and the OPzV have a positive NPV in Germany.Only the AGM and the LiFePO 4 batteries have negative NPVs in all studied countries.Figure 7 shows the results of the economic calculations.Besides the NPV, the support intensity needed for 0 NPV in percentage of the total cost and the DPP are also calculated.For the spread of safe decentralized energy production and flexible storage PV systems in Europe it would be effective to implement a California-like "Self-Generation Incentive Program" support system.Using flexible storage PV systems in the future can be a goal of every country that does not want to lose "the race for green energy."

Conclusions
In this research project, seven different flexible storage PV investments were analyzed in Germany, France, Italy, and Spain because these countries have a prominent role concerning the spread of PV technology in Europe.
It was an important question whether it is possible in the European Union to achieve a payback of the costs of flexible storage photovoltaic system investments for residential customers considering the technology-specific storage aspects prevalent in 2018.As a result of the above investigations it was found that under the appropriate economic conditions it is possible to reach that goal in the European Union in 2018.Based on the research, two flexible storage technologies were chosen as the best: Li-ion and the Olivine-type-LiFePO 4 .The Li-ion has lower investment costs but also a lower NPV than the Olivine-type-LiFePO 4 , which has higher investment costs and a higher NPV.A flexible storage PV system with Olivine-type-LiFePO4 and Li-ion can be profitable in Germany and in Spain, and the discounted payback period of the investment was between 15-26 years in 2018.The other technologies (expect the AHI and OPzS, which also have positive NPVs) currently available in the studied markets cannot be competitive with the above mentioned two investments.
A flexible storage PV system costs the same in the four countries studied but the maintenance costs, the delivery price for electric energy, the bond yields, and the inflation and interest rates are different, and they have a significant influence on investments.Countries that do not want to lose the competition of using renewable energy sources in a "smart world" should allocate enough money for such supports.
A continuous development of flexible storage PV technologies is required in the future.In the short run, governmental support and uniform European modifications to the regulatory framework, especially concerning grid fees and tariffs, will be necessary to help to introduce these flexible storage PV systems to the market.In the future, the European Union should invest more in product development in the promising directions to become competitive in flexible energy storage technologies.

Figure 3 .
Figure 3. Payback period for residential small-scale PV systems with storage in Europe [40].

Figure 3 .
Figure 3. Payback period for residential small-scale PV systems with storage in Europe [40].

Figure 3 .
Figure 3. Payback period for residential small-scale PV systems with storage in Europe [40].

Figure 4 .
Figure 4. Example of single-phase on-grid system based on SUNNY ISLAND data sheet and technology brochures [41].

Figure 4 .
Figure 4. Example of single-phase on-grid system based on SUNNY ISLAND data sheet and technology brochures [41].

Figure 5 .
Figure 5.Total average investment costs for a complete flexible storage PV system by battery technology [59-61].

Figure 7 .
Figure 7. Net present values, needed support for 0 present value (NPV) in percentage of the total investment cost and discounted payback periods (DPP) by battery type in the studied countries within a 30-year period.

Figure 7 .
Figure 7. Net present values, needed support for 0 present value (NPV) in percentage of the total investment cost and discounted payback periods (DPP) by battery type in the studied countries within a 30-year period.

Table 2 .
[27,41,ncy by flexible storage solution and the technical and economic features of selected batteries[27,41,.
* Charge/discharge cycle does not depend on DOD.EUR BATTERY TECHNOLOGY Figure 5.Total average investment costs for a complete flexible storage PV system by battery technology [59-61].

Table 2 .
Efficiency [27,41,ible storage solution and the technical and economic features of selected batteries[27,41,.*Charge/discharge cycle does not depend on DOD.

Table 4 .
Calculated maintenance costs for different battery types in the studied countries.