What is energy optimization?
Energy optimization involves making decisions and taking actions to achieve specific objectives related to self-sufficiency, emission reduction, or cost minimization. This process incorporates various energy forecasting models to effectively prioritize and allocate energy resources, such as using excess solar power to charge an electric vehicle or power a heat pump, based on the chosen optimization goal set in an energy management system.
What is self-sufficiency optimization?
Self-sufficiency is a specific subset of energy optimization, which encompasses a broader range of strategies aimed at improving overall energy efficiency, reducing costs, and minimizing environmental impact.
That said, self-sufficiency optimization hones in on strategies and technologies specifically designed to increase energy autonomy and resilience by harnessing renewable energy sources like photovoltaics and optimizing the use of on-site energy storage solutions. It seeks to strike a balance between energy generation, consumption, and storage to ensure a significant portion of the end consumer’s energy needs are met through self-generated energy.
Different use cases for self-sufficiency optimization
Energy self-sufficiency optimization entails the seamless coordination of energy assets. Here, we focus on the combination of photovoltaics (PV), battery storage and other devices in a home energy management system (HEMS). A HEMS provides real-time monitoring and control of energy flows in a household for increased efficiency and cost savings.
1. Energy generated from photovoltaics
Photovoltaics (PV) serve as the fundamental pillar of self-sufficiency optimization, allowing households to generate their own energy and reduce dependence on the grid.
They can use this self-generated renewable electricity to power any and all devices – from kitchen appliances, to heat pumps, or even electric vehicles (EVs). This minimizes a household’s carbon emissions and costs. PV has become particularly attractive given the significant rise in electricity prices during the energy crisis. Rooftop solar frees households, communities and businesses from high and volatile energy prices and gives them greater control over their energy production.
Key facts on solar photovoltaic in European Union
- Increasing production: Solar photovoltaic electricity production in the European Union (EU) has been steadily growing. As of 2022, the 27 EU member states produced 41.4 gigawatts (GW) solar PV capacity connected to their respective grids, a 47% increase compared to 2021. It is expected to exceed 50 GW deployment in 2023 and reach 85 GW by 2026.
- German dominance: Germany was the best solar market in 2022 with 7.9 GW installed capacity, and it has already reached its 2023 goal of 9 GW solar power installed by September.
- Top 5 EU solar markets: Germany (7.9 GW), Spain (7.5 GW), Poland (4.9 GW), the Netherlands (4.0 GW), and France (2.7 GW)
- Employment: Solar jobs are projected to double to 742,000 by 2030 with the existing European Commission’s 40% renewables target. In the medium term, the study anticipates a 64% increase, resulting in 584,000 EU solar jobs by 2025. And with the EU's more ambitious 45% renewables target for 2030, solar has the potential to generate 1.1 million jobs by 2030.
- Production capacity: In 2023, SolarPower Europe expects an addition of 402 GW of new solar capacity, with a forecasted growth to nearly 800 GW by 2027.
2. Photovoltaics + Battery storage
PV systems combined with battery storage represent a dynamic duo in the landscape of energy self-sufficiency optimization. This combo allows users to not only generate clean electricity from the sun but also to efficiently store surplus energy for later use. This stored energy provides users with the freedom to tap into their self-generated power precisely when they need it most, whether it’s during the evening, on cloudy days, or when the grid is strained.
This level of energy independence further reduces reliance on traditional energy supply. Batteries also give users added flexibility to draw from the grid when power is cheap and discharge the battery either for consumption or to feed electricity back into the grid when prices are high. The combination of batteries and PV systems also enables more sophisticated use cases, such as virtual power plants or energy sharing.
3. PV + Energy-consuming assets
Combining electrified assets like heat pumps and electric vehicles with a photovoltaic system allows users to power their heavy electricity consumers with clean and affordable energy. This means that users can eliminate their gas bills and even reduce their electricity bills, despite a notable increase in electricity consumption.
Charging EVs with local PV is particularly beneficial as they are a flexible asset that stands idle the majority of the time. Just like batteries, EVs can easily be charged when the sun is shining to put excess solar power to good use. With the addition of bidirectional charging, EVs can also be transformed into mobile energy storage units, which can then be discharged to power other household devices if needed. This further enhances self-sufficiency and, on a larger scale, grid resilience.
4. PV + Energy assets + EMS
Combining PV panels with energy assets and an energy management system represents the ultimate combination for self-sufficiency optimization.
While the logic of charging a car or battery with solar power may seem straightforward, an EMS brings significant advantages to the table. It offers smart decision-making capabilities by considering total energy demand, grid conditions, and tariff structures. This ensures the intelligent allocation of energy resources to reduce peak demand loads and maximize self-consumption.
Furthermore, an EMS leverages forecasting based on weather data, historical patterns, and demand response strategies to proactively manage energy assets, thereby enhancing self-sufficiency even in adverse conditions.
By seamlessly integrating with various energy assets, an EMS provides a holistic and customizable approach to energy management. It ensures not only self-sufficiency but also energy efficiency, cost savings, and resilience in today’s dynamic energy landscape through features like remote monitoring and data analytics.
In addition to these benefits, Time of Use Tariffs (ToUT) seamlessly integrate with an EMS to optimize electricity costs by leveraging fluctuating prices throughout the day. This encourages consumers to shift energy-intensive assets to periods of lower rates, resulting in both long-term cost savings and a more environmentally sustainable energy consumption pattern.
But at the very core of EMS stands self-sufficiency, which serves as a foundational use case for energy optimization and is best done through a home energy management system. A HEMS does not only empower self-sufficiency but also extends its capabilities to various other essential facets of energy management.
Some relevant energy optimization features that can be employed in a home energy management system:
Forecast-based energy management system (FBEMS)
Forecast-based energy management system (FBEMS) for HEMS minimizes PV power waste by dynamically adjusting battery capacity based on PV production forecast and household consumption, allowing curtailed PV power to be effectively stored throughout the day.
Regulatory constraints often necessitate limiting PB installations, and smart curtailment for HEMS lets the user tailor PV output to meet legal requirements and grid connection point (GCP) limits. The optimization potential depends on local regulations, and properly setting the system-specific limit during commissioning is crucial.
PV surplus prioritization
The Energy Optimizer, a XENON module, prioritizes distributing surplus PV energy to on-site devices, considering user preferences for energy allocation. The PV surplus is determined from the self-generated energy and the subtraction of the energy required for uncontrollable household load. Users can set priority preferences in the interface, balancing personal choice with self-consumption optimization.
Solar heating in HEMS supports heating with electric energy using heating rods and heat pumps if there is a compatible control interface. Thermoelectric devices act like thermal energy batteries, storing heat in air or water tanks for later use when PV production is high or electricity prices are lower.
Various charging modes are available to manage charging infrastructure, with distinctions between residential and public charging. The energy optimizer module supports charging modes like solar charge, safety charge, quick charge, and program charge.
The solar industry has seen tremendous growth the past few years and is responsible for 11% gross electricity consumption of the 46% renewable energy consumed in Germany alone. However, there are some windows of opportunities that need to be addressed.
The challenge of upfront costs for lower- and middle-income households presents an opportunity for innovative financial models. Thankfully, supportive policies can incentivize PV adoption. For example, Germany’s €28 billion renewable energy scheme promotes wind and solar power, targeting 80% renewable electricity by 2030. And in a separate but related subsidy program, the German government wanted to incentivize households from September 2023 onwards to buy private EV charge points.
Therefore, a household should be eligible for up to €10,200 in funding for a comprehensive solution comprising a charging station, solar system, and battery storage, contingent upon the presence or a binding order of an electric car. Due to the high demand, the funding pot was already exhausted less than 24 hours after its release, however.
Tim Steinmetz, Managing Director and Chief Growth Officer at gridX, welcomes the new subsidy program but also gives a crucial tip. “Combining EVs, wallboxes, solar panels and batteries is spot on. However, most of these systems – as a rule – cannot communicate with each other, especially if they are not from the same manufacture.This requires an energy management system that connects and controls all these devices in the house," he said.
The transition to widespread PV adoption, coupled with battery storage, smart controls, and HEMS, is less about technical challenges and more about seizing opportunities in finance, policy, multifamily settings, self-consumption, and grid integration. These elements collectively form a promising pathway to a more sustainable and energy-efficient future.