Transitioning to Decentralized Renewable Energy in Latvia: A Comprehensive Payback Analysis

It is believed that the transition to renewable decentralized energy supply solutions (e.g., solar panels, storage of electricity in batteries) will help promote the decarbonization of the energy system. At the same time, it is expected to happen only when society is convinced of the environmental benefits and when there are enough economic incentives for it. This study analyses the economic feasibility of transitioning to decentralized renewable energy solutions, including solar panels and electricity storage, in Latvia. Our research explores potential savings of these solutions under various scenarios based on different factors, such as national NETO billing system, financial support scheme, electricity pricing, distribution network tariffs, energy storage options, as well as the impact of the battery energy storage system (BESS) discharging strategy. The results show that the potential savings can vary depending on these factors that are changing over time. Nevertheless, the rise in small-scale power generation at households shows that there is an increasingly rapid transition from centralized electricity supply to a decentralized supply system, which might indicate that society supports energy transition.