Economics of residential energy arbitrage in california using a PV system with directly connected energy storage

Falling battery costs and increasing grid power costs have generated new market opportunities. Due to high costs, energy storage systems (ESS) typically require multiple use cases to justify their costs. ESS has shown promise for future economic and technical solutions due to potential benefits from energy storage arbitrage. Historically, ESSs with a directly connected photovoltaic (PV) system could not be placed in a Net Energy Metering (NEM) tariff, due to challenge of determining whether energy comes from a renewable PV source or fossil fuelled energy from a battery. Recent California Public Utility Commission (CPUC) rules have allowed PV paired energy storage systems to interconnect with NEM under very specific conditions. Early reports indicate that some energy arbitrage is possible in Time of Use (TOU) rates. This paper presents a limited economic analysis on the potential of energy arbitrage utilizing a Residential Energy Storage System (RESS) in typical Southern California Homes.