5. March 2025
Once a household installs a large solar array on their roof, a largish battery, and a home energy management system they can cover around 75% of their energy consumption. They still need the access the grid though to cover the remaining 25% of their energy needs. Currently, in many countries the fees for the grid are based on total consumption – if the tendency is towards more and more own-production of electricity then the contribution to grid fees will steadily decline – whilst at the same time the grid needs to maintain the same capacity (and potentially more) and level of stability. Will this make the grid operators go bankrupt?
This is a real concern in some countries where the network operators don’t have particularly high financial means and where the regulator may be reluctant to allow the grid operators to charge more per unit of consumption as this will disproportionately penalise the poorer households who can’t afford to invest in their own energy production and storage.
So, what can be done about this? One saving grace might be EVs as those households who can afford solar systems and domestic storage are more likely to invest in an EV. With the EV comes a much higher level of electricity consumption even if they have a solar system. This can then help balance out the contribution to grid fees. In some countries this may well be enough to solve this problem, but not necessarily in all countries. Another mechanism could be charge households for the feed-in of solar generated electricity – in reality this may be tricky as the value of the electricity on the wholesale market is considerably lower than the grid fees that the grid operator would normally charge for the consumption of electricity – this would lead to households opting to simply not feed into the grid their surplus electricity and simply turn off their panels. This can’t be a good solution from a wider energy transition perspective. Another alternative is to switch from a total consumption model either to one purely based on peak load or one based on peak load and total consumption. Indeed, in some countries this move has already been made.
