Decision-support strategies for photovoltaic self-consumption under declining electricity prices and limited remuneration of surplus generation

Abstract

The success of distributed photovoltaics may be undermining its own future. As solar penetration increases, electricity prices decline during periods of peak generation, reducing the value of surplus photovoltaic production. This raises a critical question: can citizen-led energy systems remain economically viable in electricity markets dominated by renewable generation? Rather than exploring technically optimal but institutionally unrealistic solutions, we examine the options available under current regulatory and market conditions. Using high-resolution consumption data from a rural community sharing a PV facility among 24 users, we identify pathways for long-term sustainability. The study makes two contributions. First, it shows that effective internal coordination can mobilize participation and investment as successfully as external subsidies. Second, it compares static, dynamic, and hybrid energy-sharing models, with and without storage, providing a flexible framework that balances efficiency, fairness, and governance. Results show that collective self-consumption reduces required PV capacity, lowers investment costs, and increases annual savings compared with individually operated systems. Alternative allocation schemes further improve benefit distribution and local electricity use, although gains depend on trade-offs between efficiency, fairness, and governance complexity. Under current electricity prices and remuneration schemes, battery storage provides limited additional economic value and becomes attractive only under specific market conditions. Overall, the long-term viability of citizen-led photovoltaic initiatives depends less on technological sophistication than on collective coordination and adaptive governance.