EVs to drive change in home energy systems

Electric vehicles (EVs) are expected to help reduce solar payback periods and accelerate the transition to renewables, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA).

The report, ‘Electric Vehicles and Batteries Can Drive Growth of Residential Solar’, analysed the economic impact of combining rooftop solar with batteries and EVs, and the effects of policy incentives and disincentives in Britain and Germany.

It found solar power, battery storage and EVs will be at the centre of global energy system disruption in the future, because of declining costs and alignment with current trends towards “decarbonisation, decentralisation, digitalisation and democratisation”. However, policy barriers and uncertainty will slow down this transition and increase costs.

According to the report, batteries and EVs can boost the economics of rooftop solar by enabling households to use more of the power they produce, meaning they spend less on electricity bills.

“EVs create a new source of demand for solar power,” said Christian Kunze, co-author of the report and Senior Energy Researcher at Smart Innovation Norway. “Battery storage gives households further control over how they use their solar generation.”

In Britain, standalone solar currently has a payback period of 19 years. The modelling found that combining 4 kW rooftop solar with an 8 kWh battery and a small 35 kWh EV reduces the payback period to four years by 2025 and one year in 2030.

Although a rooftop solar system would take significantly less time to pay off in Germany compared to Britain, taking just six years, the use of the combined solar-battery-EV system was described as a “no-brainer”. The report predicted the payback period to fall below three years by 2025 and below one year by 2030.

With these cost reductions, it states “combined solar-battery-EV systems could quickly become an obvious choice for households with south-facing roofs and off-street parking”.

However, it notes that Britain and Germany are among many European countries reducing support for solar power, with Britain recently ending all residential solar subsidies and Germany potentially following suit in 2020. This lack of support means new rooftop solar installations will earn no income from electricity generation and grid exports.

Combined solar-battery-EV systems would become more attractive under regulatory reform that allows households to sell their solar power at wholesale power market prices.

“Generous renewable energy subsidies have had their day, but scrapping these entirely and replacing them with nothing will damage renewables markets,” said Gerard Wynn, co-author and IEEFA Energy Analyst. “The falling cost of battery storage and EVs can drive new growth in renewables in Europe, but only if these low-carbon technologies have the same access to electricity network markets as fossil-fuel based ones.”

The report said both countries should continue to support the further rollout of EV chargers, especially bidirectional chargers, which are vital to encourage adoption.

“We conclude that EVs will be an increasingly potent driver of change in home energy systems and wider electric grids over the next five to 10 years,” said co-author and Financial Analyst Arjun Flora. “Residential solar PV+battery+EV charging technologies are supporting the societal shift from default conventional electricity consumption to a more active and conscious ‘prosumption’ behaviour.”

The benefits of integrating residential solar, battery storage and EVs are expected to extend beyond Britain and Germany to sunnier countries around the world.

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