Optimal Design of Solar PV Farms With Storage

In the context of a large-scale solar farm participating in an energy market, we consider the problem of allocating a capital budget to solar panels and storage to maximize expected revenue over multiple time periods. This problem is complex due to many factors. To begin with, solar energy production is stochastic, with a high peak-to-average ratio, thus the access link is typically provisioned at less than peak capacity, leading to the potential for waste of energy due to curtailment. The use of storage prevents power curtailment, but the allocation of capital to storage reduces the amount of energy produced. Moreover, energy storage devices are imperfect and their costs diminish over time. We mathematically model these constraints and demonstrate that the problem is still convex, allowing efficient solution. Numerical examples demonstrate the power of our model in doing a sensitivity analysis to various design assumptions. We find that it is typically optimal to invest 90-95% of the initial capital on solar panels and the rest on storage. Interestingly, it is best to defer investment on lead-acid batteries (but not Lithium-ion batteries) closer towards the end of lifetime of the PV panels.