Enhancing the Value of Residential Energy Storage Using a Two-Threshold Control Policy: A Household-Level Analysis

The intermittent and unpredictable nature of renewable energy sources has spurred growing interest in energy storage. However, effective management of energy storage is far from trivial for residential consumers owing to various compensation and pricing structures, as well as uncertainties in electricity demand and generation. This paper studies the battery control problem for a grid-connected residential prosumer with renewable generation and battery storage under two-tiered time-of-use tariffs with sellback compensation. We find that the structure of the optimal policy critically depends on the price configuration: under high sellback compensation, a policy requiring no calibration is optimal, whereas in the complementary case of reduced sellback compensation, careful household-specific calibration is warranted. We therefore propose an effective battery operating policy utilizing two thresholds --- a ``purchase-up-to'' threshold in the off-peak period and a ``sell-down-to'' threshold in the peak period --- together with an efficient heuristic to calibrate them. Through a case study using real data from 56 households in a U.S. city, we show that this simple and interpretable control policy can significantly increase the value of home energy storage and achieve performance close to that of theoretical battery optimization under certainty, thus highlighting its appeal relative to more complex control approaches in this setting. Our findings provide valuable insights into the effective operation of residential energy storage systems from an individual household's perspective.