In this paper, we quantify the economic and environmental implications of operating a standalone photovoltaic-battery system (PVB) while varying the battery’s minimum allowable state of charge (MSOC), the load profile, and simultaneously incorporating ambient temperature effects in hot climates. To that end, Saudi Arabia has been chosen for this case study. Over a project lifetime of 25 years, we find that, contrary to the widely accepted norm of 50% being a reasonable MSOC, a lower MSOC can bestow economic benefits. For example, a MSOC of 20% results in a lower number of batteries required throughout the lifetime of the project—while still meeting demand. For a village of 1000 homes, this translates to a saving of $47 million in net present value. Further, incorporating temperature effects results in deducing more realistic costs that are 125% higher than the ideal scenario (i.e., when temperature is not modeled). This difference stems from underestimating the actual number of batteries needed throughout the project lifetime. Compared to a diesel-powered microgrid, and for a village of 1000 homes, a PVB would, on an annual basis, avoid emitting 5000 tons of carbon and avoid burning 2 million liters of diesel.
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