Economic feasibility of solar self-production : a case study of households in the Mikkeli area

Abstract

This thesis assesses whether residential solar photovoltaic (PV) self-generation makes economic sense in the Mikkeli region of Finland given Nordic climates and electricity market characteristics. The research focuses on both independent PV systems and those integrated with battery energy storage systems (BESS), along with generally assisting smart electric vehicle (EV) charging through recorded household energy use as well as historical measurements of solar energy produced. The quantitative case study is based on three residential installation sites located within Mikkeli. The assessment integrates the real world usage data collected by smart meters installed at each residence, along with PV inverter operation logs, Nord Pool FI spot prices, PVGIS solar modeling, loss of energy due to snow cover adjustment modeling, PV simulation, and a digital twin analysis of a lithium iron phosphate (LiFePO₄) battery system. A 20-year discounted cash flow analysis, which includes Net Present Value (NPV), Internal Rate of Return (IRR), Levelized Cost of Electricity (LCOE), and self-consumption (SCR) and self-sufficiency (SSR) ratios, was used to analyze the economic feasibility of the respective applications. Overall findings indicate that high-use Finnish households can generate sufficient savings from their PV systems to warrant their installation and, in particular, households utilizing electric heat are the greatest beneficiaries of this type of installation. Smart EV charging improves solar self-consumption dramatically and provides the most cost effective method of providing flexibility within the three analyzed configurations. On the contrary, residential battery storage systems face ongoing economic challenges as a result of excessive initial capital expenditures and a limited amount of seasonal usage. The study concludes that properly sized residential PV systems can provide economically viable long-term electricity cost reductions in Finnish sub-arctic conditions, while smart EV charging offers strong potential for improving household solar utilisation without the high costs associated with residential battery storage.