A holistic approach to understanding the impact of battery energy storage systems on the levelized cost of energy of photovoltaic systems

Abstract

Battery Energy Storage Systems (BESS) are crucial for stabilizing the intermittent energy supply from photo­ voltaic (PV) systems, yet they introduce significant costs and complexities in determining optimal sizing. This study presents a comprehensive methodology for deriving a correlation coefficient between the Levelized Cost of Electricity (LCOE) of PV systems with and without battery storage. This coefficient is designed to aid decisionmakers, even those with limited technical or economic background, in understanding the cost-benefit dynamics of BESS integration. Our analysis reveals how varying storage capacities and surplus electricity levels impact the LCOE, identifies the time-of-use (ToU) tariff thresholds required for economic viability of PV systems with BESS, and establishes the cost ratio between solar PV-generated power and grid tariffs that justifies BESS imple­ mentation. The results provide valuable insights into optimizing BESS to enhance the economic efficiency and feasibility of solar PV systems, offering practical guidance for stakeholders in the renewable energy sector.