Welfare Effects of Residential Battery Policies

As solar penetration rises, many electricity systems face midday surplus generation and steep evening demand ramps that intensify scarcity pricing and reliability concerns. Residential batteries have the potential to mitigate these dynamics, but their system value depends on both household adoption decisions and battery operation after installation. This project combines California Public Utilities Commission (CPUC) installation records, PG&E interval consumption and billing data, California wholesale market data, and blackout records to estimate how incentives, export-credit policies, retail electricity prices, and outage risk influence battery adoption, as well as how adoption changes net electricity imports during system-critical hours. These estimates inform a structural model of household battery adoption and dispatch that links individual behavior to wholesale market outcomes. Counterfactual analyses compare alternative export-credit and subsidy designs and quantify their effects on peak net demand, electricity bills, and welfare for adopters and non-adopters, including spillover effects through market prices and system dispatch. The project provides empirical evidence to inform export-credit and incentive design in high-solar electricity systems, quantifying both aggregate efficiency gains and the distribution of benefits across consumers.

Eliana Sena Sarmiento

Doctoral Student, Economics

Eliana Sena Sarmiento is a doctoral student in the Department of Economics at the University of Pennsylvania. She is an applied microeconomist working at the intersection of labor economics and industrial organization.

Arthur van Benthem

Professor of Business Economics and Public Policy

Arthur van Benthem is an expert in environmental and energy economics, exploring the economic efficiency of energy policy. He is a faculty fellow at the Kleinman Center and an professor of business economics and public policy at Wharton.

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