Combined third-party ownership and aggregation business model for the adoption of rooftop solar PV-battery systems: Implications from the case of Miyakojima Island, Japan

Abstract

Solar photovoltaics with behind-the-meter energy storage systems are gaining recognition as net energy billing replaces feed-in tariffs because they can unlock demand-side flexibility, keep grid stability, and enhance the resilience of end users. However, incumbent grid companies tend to prioritize grid stability and reliability and disregard resilience, which decreases end users’ perceived benefits, intention, and adoption of the systems. The combined third-party ownership–aggregation business model could drive adoption because it can enhance grid stability and reliability, and resilience at the same time. This study explores how the model works to increase the intention and adoption, and what policies and regulations are required to enable the model to mitigate the conflict of interest taking Miyakojima Island in Japan as a case study. The study finds that the model can increase adoption by reducing perceived risks. Policy and regulations, and resistance and inert of incumbent grid companies block the model from effectively working to change the benefit-sharing. Science-based regulations on the use of energy storage systems during power outages, stringent policy implementations of updated renewable energy targets and the 2050 carbon neutrality, and detailed time-of-use pricing can change the benefit-sharing in favor of end users and increase adoption.