Market integration of behind-the-meter residential energy storage

A new business opportunity beckons with the emergence of prosumers. This article proposes an innovative business model to harness the potential of aggregating behind-the-meter residential storage in which the aggregator compensates participants for using their storage system on an on-demand basis. A bilevel optimization model is developed to evaluate the potential of this proposed business model and determine the optimal compensation scheme for the participants. A realistic Texas case study confirms the year-round profitability of the model, showing that participants could earn on average nearly $1500 per year, and the aggregator could make an average profit of nearly $2000 per participant annually. The case study confirms that the proposed business model has potential, and that the main driver for a successful implementation is a suitable setting of the compensation paid to participants for using their energy storage system.