Profits from selling electricity for home energy storage system

Where a profitable application of energy storage requires saving of costs or deferral of investments, direct mechanisms, such as subsidies and rebates, will be effective. For applications dependent on price arbitrage, the existence and access to variable market prices are essential.

While energy storage is already being deployed to support grids across major power markets, new McKinsey analysis suggests investors often underestimate the value of energy storage in their business cases.

Evaluating potential revenue streams from flexible assets, such as energy storage systems, is not simple. Investors need to consider the various value pools available to a storage asset, including wholesale, grid services, and capacity markets, as well as the inherent volatility of the prices of each (see sidebar, “Glossary”).

In application (8), the owner of a storage facility would seize the opportunity to exploit differences in power prices by selling electricity when prices are high and buying energy when prices are low.

The amount of money you can earn from selling electricity depends on your place in the market. Registered electricity generation plants earn wholesale electricity prices for their power, while consumers can earn retail credits. Let's look at each in more detail.

In summary, selling energy back to the grid can be complicated and expensive. However, there are other options available to commercial and residential consumers that are looking to reduce energy costs. Our team understands the electricity grids in the U.S. and can help you navigate selling energy back to the grid.