A Novel Statistical Framework for Optimal Sizing of Grid-Connected Photovoltaic–Battery Systems for Peak Demand Reduction to Flatten Daily Load Profiles

Abstract

Integrating photovoltaic (PV) systems plays a pivotal role in the global shift toward renewable energy, offering significant environmental benefits. However, the PV installation should provide financial benefits for the utilities. Considering that the utility companies often incur costs for both energy and peak demand, PV installations should aim to reduce both energy and peak demand charges. Although PV systems can reduce energy needs during the day, their effectiveness in reducing peak demand, particularly in the early morning and late evening, is limited, as PV generation is zero or negligible at those times. To address this limitation, battery storage systems are utilized for storing energy during off-peak hours and releasing it during peak times. However, finding the optimal size of PV and the accompanying battery remains a challenge. While valuable optimization models have been developed to determine the optimal size of PV–battery systems, a certain gap remains where peak demand reduction has not been sufficiently addressed in the optimization process. Recognizing this gap, this study proposes a novel statistical model to optimize PV–battery system size for peak demand reduction. The model aims to flatten 95% of daily peak demands up to a certain demand threshold, ensuring consistent energy supply and financial benefit for utility companies. A straightforward and effective search methodology is employed to determine the optimal system sizes. Additionally, the model’s effectiveness is rigorously tested through a modified Monte Carlo simulation coupled with time series clustering to generate various scenarios to assess performance under different conditions. The results indicate that the optimal PV–battery system successfully flattens 95% of daily peak demand with a selected threshold of 2000 kW, yielding a financial benefit of USD 812,648 over 20 years.