New digital technologies such as big data analytics, internet of things, artificial intelligence, robotics and blockchain, in combination with the rapidly falling costs of residential storage, are creating the grounds for “smart” prosumers’ (also called active consumers) business models. If the right policy framework is implemented, all types of electricity consumers will be able to generate and consume solar power—including tenants and industrial consumers. Digital solar & storage can also unlock flexibility potential from prosumers to operate solar power systems in a grid- and consumer-friendly manner.
Increased self-consumption rates for smart solar & storage prosumers
The rapidly falling prices of battery storage are constantly improving competitiveness of stationary battery storage systems that are now available from producers in the Americas, Asia-Pacific and Europe. Next to stationary storage, the emergence of electromobility is giving more and more consumers access to their own mobile battery storage.
The key to smart buildings for solar prosumers is energy management systems. These game changing software products allow monitoring and operating all actors in a prosumer household – the different building loads including heat pumps, the battery or the electric vehicle battery charging process.
Digital solar & storage are the base for any smart self-consumption model. While typical on-site solar systems can achieve a physical self-consumption rate of around 20 to 35%, smart solar & storage prosumers can even reach a 60 to 90% ratio. For commercial and industrial buildings that only need power during the daytime, a 100% self-consumption ratio can usually be very easily met. A smart solar & storage prosumer doesn’t need power from the grid most of the time, which leads to reducing grid losses and helps shave peak demand, which is at risk of increasing with the electrification of economic activities, notably transport.
The development of collective self-consumption
Thanks to innovative regulatory schemes and smart metering, the prosumer model is no longer reserved to single-house residential consumers or single-building companies. The development of collective self-consumption models allows sharing self-generated electricity among different consumers in the same premises or in a close neighbourhood. The ‘Mieterstrom’ (on-site community solar) framework in Germany, for example, enables collective self-consumption of tenants within a building, and smart metering systems make it possible to manage energy flows among participants. In France, the Autoconsommation (self-consumption) collective framework allows energy sharing among prosumers within a single low-voltage branch.
While a number of countries have implemented policy frameworks for collective self-consumption, these schemes are only starting to develop. However, in the European Union, the Clean Energy Package legislation, passed in 2018/2019, recognises collective self-consumption for the first time and guarantees rights to participants, which will set the stage for member states to implement such models and offer the opportunity to tenants, local public authorities or office buildings to access on-site generated solar for self-consumption.
Aggregated solar & storage prosumers
Beyond clean and low-cost energy security at home or in the commercial space, smart solar & storage prosumers can provide much needed flexibility services to the grid. Unlike coal or nuclear power plants, energy storage batteries can react very fast to a network constraint and provide a very short-term balancing service.
The aggregation of prosumers’ loads and batteries can solve two challenges of consumers’ engagement and the access to balancing markets, which are usually designed for much larger power providers. Aggregators can easily enter flexibility markets and they can monitor the flexibility of a group of prosumers.
Many projects have been demonstrating the possibility to rely on residential battery systems. In December 2018, after two years of demonstration, the sonnen community, a business model of energy storage provider sonnen, which is aggregating solar prosumers’ batteries in Germany, qualified to provide primary balancing power to transmission grid operator TenneT.
A major obstacle to the development of prosumer business models is the availability of adequate smart metering systems and network tariff designs. Often energy storage facilities are charged twice when providing upward and downward flexibility services. In the EU, the new Clean Energy Package obliges member states to roll-out smart meters (on the basis of a cost-benefit analysis) and removes the double charges on prosumers’ storage used for flexibility.
Solar & storage microgrids
Microgrids are defined as a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that act as a single controllable entity with respect to the grid. Now that solar is so cheap, local grids are becoming increasingly interesting, in particular for industrial sites and local municipalities, allowing them to source their own self-generated solar electricity to reduce energy costs and provide back-up or uninterruptible power supply.
While one might think that micro-grids are mainly developed to support renewables-based electrification in rural areas of the developing world or islands, indeed microgrids are often also increasingly used in grid-connected areas where they operators are able to run them in islanding mode if market conditions are not favourable, in case of grid issues, or as mentioned above, because corporates prefer to have their own secure and low-cost power supply.
All about policy frameworks
While digital solar & storage technologies to enable solar prosumers are available at an affordable cost today – and are constantly and quickly becoming more sophisticated – they need the right policy frameworks to tap into the full potential of solar prosumers. For that reason, SolarPower Europe’s Digitalisation & Solar Task Force has published a report that looks specifically at how policymakers and regulators from across Europe can and are encouraging innovative digital business models in the solar PV ecosystem.
For more solar trends, download the Global Market Outlook for Solar Power 2019-2023