BL wishes to contribute to the green transition by facilitating the installation of rooftop solar panels on housing units. However, existing tariffs and regulatory framework reduce the viability of the business case.
Copenhagen Economics was asked to help illustrate and document this issue in a way that could effectively inform and influence policymakers. Thus, we developed a model that maps out the hourly production and consumption of electricity in a selected dwelling. Utilising the model, we were also able to identify the most efficient way to use battery storage to balance out the consumption and production of electricity.
"Copenhagen Economics provided clear insights into the potential benefits of rooftop solar on rental housing to alleviate the pressure on the grid." Solveig Råberg Tingey, Deputy Executive Director, BL
Our analysis shows that the integration of solar panels with batteries can successfully reduce local peak-hour demand, thereby mitigating bottlenecks and the need for costly grid expansion. Furthermore, we show that restructuring tariffs can improve the viability of deploying solar panels at the local level.
Expanding the grid to accommodate a growing electricity demand is not just a Danish issue. The cost of expanding the grid increases with peak demand, which is expected to grow by 80% towards 2050.(1) To address this, flexible solutions like local production capacity and batteries are needed. Batteries can store excess solar energy, or charge directly from the grid during low-cost periods, for later use during peak hours.
The REPowerEU plan estimates that nearly 25% of the EU’s electricity consumption can be met by rooftop solar power.(2) All over Europe, local non-profit housing organisations can contribute with rooftop solar and batteries to help speed up this process, giving rise to significant benefits. However, these projects are often hindered by national regulation and high tariff costs. Therefore, it is important to pave the way for more rooftop solar panels and developing and demonstrating the business cases is the first key step to unlocking the potential across Europe’s non-profit housing sector.
Lower energy bills: Solar panels can help reduce energy poverty by providing tenants with self-produced electricity. Furthermore, surplus electricity production can (depending on local conditions) be sold to the grid securing an additional revenue stream.
Save on grid costs: Local production decreases peak-hour demand and mitigates grid bottlenecks, a key cost driver of future grid investments.
Energy independence: Tenants become less exposed to fluctuations in energy prices, simultaneously with increasing national energy sovereignty.
Accelerating the green transition: Large scale solar panel deployment can reduce the carbon footprint of non-profit housing dwellings and societies in general.
1) Increase in electricity demand in Europe towards 2050 in the IEA APS (Announced pledges scenario), IEA (2022) World Energy Outlook 2022
2) EU Commission (2022) EU Solar Energy Strategy
