Techno-Economic Evaluation of Electricity Pricing Structures on Photovoltaic and Photovoltaic-Battery Hybrid Systems in Canada

Abstract

There is limited understanding of how electricity market fluctuations and dynamics, such as changes in electricity pricing schemes and rate structures impact the profitability of hybrid battery and solar photovoltaic (PV) systems. This study provides a techno-economic evaluation of PV and hybrid PV-battery systems using the Solar Alone Multi-objective Advisor (SAMA), an open-source tool used for optimally sizing PV-based systems. The study focuses on the economic implications of time of use (ToU) and tiered rate (TR) pricing structures in Ontario, Canada and examines the potential impact of an investment tax credit. Furthermore, a sensitivity analysis is completed, which evaluates fluctuating battery costs and grid escalation rates, provides new insights into the financial viability of hybrid systems under various economic conditions.  The results show the substantial influence of these rate structures, with ToU pricing generally proving more economically advantageous compared to TR pricing. While net-metered PV systems are increasingly attractive due to favorable economic metrics, the addition of battery storage under current cost conditions in Ontario remains less viable.  The results support the importance of rate structures to enhance the economic viability of distributed PV systems to help achieve sustainable development goals.

Keywords: Photovoltaic, Battery, Solar Energy, distributed energy, residential solar, Energy Policy