The Home Battery in a Changing Energy Market

Key words: Home battery, Battery Energy Storage System (BESS), dynamic energy contract, day-ahead-price

Copyright © 2025 Patrick van Tol et al. This is an open paper distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

The Dutch energy net is undergoing major changes. The shift in power generation to solar and wind, combined with increased demand due to electrification results in prices being volatile throughout the day. The aim of this paper is to evaluate the economic performance of a home battery.

The Dutch government introduced the net-metering scheme in 2004 to encourage households to install photovoltaics (PV) -systems [1]. Under this scheme, households can sell energy back to the grid at a price that is deducted from the amount of energy households take from the grid at the end of the year. This surplus of energy will be sold at market price or a fixed fee depending on the kind of contract [2, 3].

The shift in power generation to solar and wind, combined with increased demand due to electrification, is causing problems for the Dutch grid. This is due to congestion and overload, which increases the cost of managing the network and requires additional investment [4 to 10].

In the Netherlands, dynamic energy contracts, based on the EPEX day-ahead prices, have been on the rise for several years. There is a direct relationship between the price and the weather forecast. With sunny or windy weather forecasting prices will fall. When the forecasting is overcast and windless, prices are high. This unique spread offers the possibility of using a home battery to reduce electricity consumption costs but also to trade in electricity that is based on price differences.

Nevertheless, a dynamic energy contract is considered less interesting, and a home battery is seen as neither feasible nor cost-effective [11 to 13].

The aim of this paper is to evaluate the economic performance of a residential home battery within the current net-metering scheme. The analysis was done with a case study. In addition to the existing solar panels, a home battery has been installed in 2022 for emergency power. Combined with dynamic control which enables energy trading.

For the following five scenarios the analysis compares the direct cost per kWh for purchased electricity withdrew and delivered to the grid. Additional costs are fixed amounts, regardless of consumption, and therefore do not affect the comparison.

1)    A variable contract that is renewed every quarter with fixed prices per kWh;

2)    A Variable contract with a PV-system installed;

3)    A Dynamic contract with hourly variable kWh prices;

4)    A Dynamic contract with a PV-system installed;

5)    A Dynamic contract with a PV-system and a dynamically controlled home battery/BESS installed.

Method

The data in the consideration stems from a house in Haarlemmermeer, here is scenario five implemented. The consumption data for scenarios one to four are also derived from this data.

Installation

The PV system has a power of 2220 Wp. If the PV system and the home battery cannot supply enough electricity, the difference is taken from the grid. If there is a surplus, the difference is fed back into the grid. See Figure 1 for the schematic representation.

Figure 1. Schematic representation of the electricity system.

The residential Battery Energy Storage System (BESS) is made up of several components. The battery itself consists of 16 LiFePO4 cells with a total capacity of 14,3 kWh. The battery management system (BMS) protects the cells from damage of extreme conditions and provides communication between the battery and the control system.

A bidirectional inverter is used to connect the 'Direct Current' (DC) battery to the ‘Alternating Current’(AC) grid. The inverter/battery charger being used has a maximum continuous power of 4 kW. Various sensors measure the DC as AC consumption. For smart control of the inverter and the battery a controller is required. Self-consumption of the inverter is approximately 25 W at low load and approximately 420 W at maximum power.

For efficiency and reduced noise production, the power on the AC side of the inverter is limited to 2200 W charging and 3000 W discharging. The efficiency of the inverter is around 93/94%, respectively. The battery efficiency is approximately 97%. The round-trip efficiency, consisting of the conversion to DC or reversed to AC by the inverter as the chemical efficiency of the battery, is theoretically about 84,8% ≈ (93% · 94% · 97%). The actual efficiency will differ as it depends on the load condition.

The BESS is controlled with an algorithm that selects the lowest price of electricity for consumption with the possibility of trading. This will allow the electricity generated by the PV-system to be delivered to the grid or be stored in the BESS. When the prices are high the electricity can be fed back later. In case of insufficient charging from solar, the battery can also be charged from the grid and consume electricity later when grid prices are higher. With smart control, self-consumption of electricity generated by the solar panels can be increased as well as the financial benefit.

Measured values

Measurement data from 2024 is used in the case study. The dataset has a 15-minute resolution with cumulative values of measured energy flows in kWh. The dataset contains information on:

Egrid>cons          grid to the consumers

Egrid>bat           grid to the battery

Ebat>grid           battery to the grid

Epv>grid            PV-system to the grid

Epv>bat             PV to the battery

Epv>cons            PV to the consumers

Ebat>cons           battery to the consumers

The dataset contains the kilowatt hours on the AC side of the BESS. Conversion losses from AC to DC or vice versa are included in the measured data.

Scenario derivation

From scenario five, scenarios one to four are derived in the following manner:

Scenario one and three:

Efrom grid;sc1,3 = Egrid>cons + Epv>cons + Ebat>cons    (eq. 1)

Scenario two and four:

Epv>grid;sc2,4 = Egrid>cons + Ebat>cons                   (eq. 2)

Epv>grid;sc2,4 = Epv>grid + Epv>bat                       (eq. 3)

Efrom grid;sc1,3 = taken from the grid for scenario one and three

Efrom grid;sc2,4= taken from the grid for scenario two and four

Epv>grid;sc2,4  = fed to the grid for scenario two and four

For scenarios one and two, fixed prices of kWh per three months are being used. The information is from major Dutch energy companies. In 2024 net consumption prices ranged from 277.95 €/MWh to 381.95 €/MWh with an average of 314.49 €/MWh.

For scenarios three to five, variable wholesale prices from the ENTSO-E Transparency Platform are used. To determine the consumer price, the purchase fee of a power company, plus energy tax and VAT are used. In 2024, net consumer prices ranged from −61.95 €/MWh to 1 236.33 €/MWh with an average of 273.59 €/MWh.

Results

In 2024 the consumption of electricity was about 3 702 kWh and PV production was about 2 141 kWh. The difference was taken from the electricity grid.

Figure 2 shows the electricity import-export profile per 15 minutes, including electricity trading.

Figure 2. Import-export profile of scenario 5 for 2024.

The tables 1 & 2 and figures 3 & 4 show the results of the consideration of the scenarios.

Figure 3. Monthly electricity taken from the grid in kWh over 2024.

Table 1. Net electricity consumption costs and kWh taken/feed-in over 2024.

Figure 4. Monthly net electricity consumption costs per month over 2024, excluding grid connection charges, network operator charges and energy tax reduction.

Table 2. Average effective net electricity prices per MWh over 2024.

In scenario three, a dynamic energy contract, the direct cost for 3 702 kWh from the grid is €1 012. Compared to scenario one, an energy contract with fixed prices, switching to an energy contract with dynamic hourly prices saves about €153.

In scenario five with a dynamic energy contract, a PV system and a dynamically controlled BESS, instead of the required difference between consumption and production of 1 561 kWh, a total of 4 115 kWh was taken from the grid. This is 2 554 kWh more than required. Of this, 202 kWh was used for DC loads, about 374 kWh are conversion losses and 1 978 kWh was self-consumed later or fed back for trading purposes. Together with 113 kWh conversion loss from stored solar power, the total conversion loss is about 487 kWh.

Of the 2 141 kWh generated by the PV system, 925 kWh were directly self-consumed, 471 kWh were directly exported to the grid and about 745 kWh were stored in the battery, after conversion loss about 632 kWh, for self-consumption or fed back later.

Despite taking 2 554 kWh more from the grid, net consumption costs fell to €128. A saving of €1 037 compared to scenario 1 with fixed kWh prices, €884 compared to scenario 3 with a dynamic contract and €393 less than scenario 4 with only a PV system.

Conclusion and recommendations

By adding a dynamically controlled BESS, net electricity costs are reduced primarily in the following ways by using the battery as a buffer:

·         More PV power can be self-used;

·         PV power can be feed into the grid at times with higher prices.

·         Electricity can be taken from the grid at cheap moments to be self-used or being traded during moments with high prices.

The savings from adding the dynamically controlled BESS was in 2024 about €393. The purchase price of the BESS on March 1st of 2025, is about €3150 including VAT. The return of investment period, assuming current market conditions, is then approximately eight years. It should be considered that in the case study the power of the inverter has been limited. Without this limitation, the proceeds may be higher and the return on investment period shorter.

Besides the benefit of financial, adding a BESS in the case study had another benefit "emergency power" in case of power failure.

Although the use of BESS in residential buildings is often proposed as a solution to grid problems, BESS alone is not sufficient. Large-scale deployment of home batteries requires more sophisticated controls than just steering on the national EPEX price. One step in this direction is also the control of BESS based on the balancing market [14 to 16]. However, this market is a national market and therefore does not take the local problems into account. Another option is to step away from a single national electricity price and to split the Netherlands into several regions, each with own prices.

When the Dutch government removes the net-metering scheme on 1 January 2027 [17], market conditions may change again. Feeding back to the grid will yield a lot less, as the energy and VAT tax will no longer be refunded. The focus will shift to increasing self-consumption from PV-systems, so less electricity will have to be purchased, on which energy tax and VAT must be paid.

Given the playing grid problems and the upcoming rule change it is recommended to further investigate or simulate the following situations:

·         Effects of abolishing the net-metering scheme

·         A BESS without smart control as a buffer serving zero on the meter;

·         A BESS used only for peak-shaving to relieve the grid;

·         A BESS with smart control on purchasing, but without trading for lowest possible purchasing costs;

·         The situation where only a BESS is present without a PV installation.

Conflicts of interest

The authors declare that there are no conflicts of interest regarding the publication of this paper.

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