Solar panels and electric cars are becoming increasingly common, and next in line are home batteries that integrate the entire energy system into a functioning whole. Samuli Honkapuro, Professor of Energy Markets at LUT University, explains how households can benefit from new energy solutions.
Two Ways to Save: Spot Pricing and Power-Based Pricing
According to Honkapuro, households now have better opportunities than ever to save on energy costs. For example, highly volatile electricity prices enable savings by timing electricity use to coincide with cheap spot price hours.
Another significant factor is power-based pricing. In power-based pricing, you pay for how much electricity is used simultaneously. For instance, if you charge an electric car, heat a sauna, and heat a water heater all at once, a consumption peak occurs, resulting in an additional charge. Batteries and smart control help smooth out these peaks and keep bills under control.
In practice, this means that a household can reduce peak loads on its electricity bill and automatically respond to spot price fluctuations.
When seeking cost savings, it’s advisable to store electricity, for example with solar panels, when it’s cheap and available, and discharge from the battery when electricity is expensive.
Decentralized Systems Are More Reliable
As more and more households adopt solar panels, batteries, and electric cars, the change is also visible across Finland’s entire electricity grid. According to Honkapuro, a decentralized system is fundamentally a more reliable solution.
– If one component fails, it doesn’t affect the entire system much, he explains.
However, coordination is important. Honkapuro emphasizes that decentralized solutions need smart control to function.
– An ideal household energy system would have smart energy use, storage in some form, decentralized energy production, and especially smart coordination of the whole thing.
In practice, this means a home where solar panels produce electricity, a battery or electric car stores it, and a smart system optimizes everything in the background. The system takes care of when electricity is charged into the battery, when it’s used, and when it’s worthwhile to buy from the grid. The consumer doesn’t need to monitor spot electricity prices themselves.
Change Is Rapid
Electricity markets are in flux, and change may be faster than expected.
Over the next five years, more and more Finnish homes can transform into their own small power plants, where smart technology, decentralized production, and storage work seamlessly together.