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  • Writer's pictureMarkos Romanos

Energy Self-Consumption: Residential

In the first part of this post we introduced the concept of energy self-consumption, where we explained what kind of facilities exist and what benefits Pylon Network can offer to the owners of these assets.

In the second part, we talked about the types of self-consumers connected to the grid and how they affect (and are affected by) current legislation in Spain.

In this (third) part we are going to focus on the energy self-consumption for  the residential sector.

Part 1 – Energy Self-consumption: Introduction.

Part 2 – Energy Self-consumption: Current state legislation and Types of self-consumers connected to the grid.

Part 3 – Energy Self-consumption: Residential.

Part 4 – Energy Self-consumption: Industrial.

Part 3: Energy Self-consumption: Residential.

Perhaps the most anticipated article: energy self-consumption applied to the residential sector. In other words, the possibility of self-consuming electricity at a domestic level, whether in single-family or collective homes.

Let’s start by looking into its elements (what it consists of) and then move into other important aspects like related costs, savings potential, associated taxes and, last but not least, the payback period.

What does it consist of?

Self-consumption in the residential context, seeks to cover a major part of the energy demand through a self-owned generation facility, installed within the same location (home). Using a solar panels (photovoltaic) installation as the most common example, its main elements are:

– Photovoltaic (PV) panels

– Inverter

– Protections box

– DC Installation

– AC Installation

– Energy meter (optional)

Photovoltaic modules are the most common elements to be used as generators in self-consumption facilities (domestic wind turbines are found to a much lesser extent). These modules are installed on structures adapted to each surface – whether in floor, roof, horizontal, inclined, vertical, tile, concrete, sheet … Some important aspects to take into account:

– Inclination. Depending on the angle of inclination we are able to optimize the production throughout the year and the day while aiming for a specific generation profile (e.g. optimize the winter or summer production).

– Loads to support. The structure must support its own weight, i.e. the modules and the additional stress factors from wind or rain.

– Humidity and leaks. The joints of the structure with the surface must be properly insulated to avoid problems with humidity penetration.

The inverter is the system responsible for converting the energy generated by the photovoltaic panels, from Direct Current (DC) to Alternating Current (AC) and according to the desired/contrained characteristics of frequency, voltage, intensity and synchronism ditated by the network standards – so that it can be safely used at home.

Between the modules and the inverter, there is the DC installation, consisting of 2 cables, one positive and one negative, and the safety protections – usually fuses.

The output from the inverter is in AC, coming with over-current protections and neutral connections to ground. The AC circuit will connect to the point of external metering, where the electricity is fed into the network, through a dedicated meter for generation, or through the utility meter – if this is bidirectional and is capable to integrate self-consumption features.

In the case of Pylon Network, in order to join the platform and participate in the energy transaction marketplace, each actor must integrate our software into devices and energy assets that they already own (such as storage systems, solar inverters, datahubs …). In case they do not already have a device that monitors consumption or production, a plug-and-play METRON meter can be installed – already integrate software. These devices are in charge of sending the consumption or production data to the platform, which in turn, will be used by Pylon Network users and energy stakeholders to offer energy market services to third parties.

Several companies of energy meters such as Smappee and eGEO, or domestic battery companies like AMPERE Energy, are already testing our system. For those of you who are interested, you can check the operation of the platform in real-time through the METRON App, which is available in  APPstore (iOS) and Google play (Android), or through the DEMO on our website,

Steps to follow

Starting from scratch, these are the recommended steps to follow if you are thinking of investing on a photovoltaic self-consumption installation and going through the necessary legal and operational procedures. Note that this specific guide applies to the Spanish market:

  1. Carry out a study to size the installation that best suits your consumption profile. It is advisable to rely on an energy consultant (accredited professional) in order to obtain a detailed and personalized feasibility study – rather that online tools or applications.

  2. Installation of equipment by a qualified/official electrical installer. Work may also be necessary to fix the structure and facilitate wiring.

  3. Legalization of the installation before the territorial organism and before the electric distributor. It is necessary that the installation complies with the RBT (Electrotechnical Regulation for Low Voltage) and the requirements/constraints set by the electrical distributor. It is necessary to prepare a Certificate of Electrical Installation (bulletin) and a technical report based on the power performance of the installation signed both by the electrical installer and engineer/consultant.

  4. Start-up of the installation and configuration of the equipment.

Let’s look at the numbers

Let’s take a look on the economics of a photovoltaic self-consumption installation in our home. Does it make sense to invest?

To begin with, we must be aware that in order to find the best economic / investment savings ratio, we must find the installation whose power and generation characteristics allow us to maximize the energy generated – so that it is not lost. So, we will look for the installation that adapts best into our energy needs throughout the year. On the other hand, it will be very difficult to obtain profitability from an installation for a supply whose use is occasional (weekend apartment / holiday, for example).

We will have costs that are directly proportional to the power to be installed – the photovoltaic modules and their structure – and other, indirect costs that do not vary proportionally – the inverter, the protections, the electrical installation, construction works and legalization.

For example, a 6-module installation costs between € 4,000 and € 4,500 Inc VAT and has a peak power of 1.5 kWp. On the other hand, a 12-module installation can cost between € 6,000 and € 6,500 with a peak power of 3 kWp. Despite having twice the power and producing twice the energy, the cost is not proportional. It has only proportionally increased for the number of modules and associated structure. However, the inverter, safety protections, electrical installation, work and legalization, practically cost the same for both installations.

In the first case we get  € 2.83 / Wp installed, while in the second we get € 2.08 / Wp installed. In power capacities of higher than 10 kWp we can achieve costs below 1.6 € / Wp installed.

Simulations Examples

Each installation is different, either due to the consumption profile (percentage of self consumptio) that will be more or less favorable to cover with the installation, or because of its architectural characteristics – possible integration of modules on sloping or horizontal roof, distance of wiring to point of connections … All these factors affect the costs and savings – and hence the payback period (ROI) can greatly vary depending on all aforementioned conditions.  As seen on the table below, payback period can vary from 3, up to 15 years (or even more).TypeAnual Consumption (kWh)Solar Power (kWp)Solar Production (kWh)% Generated over  ConsumptionInstallation CostROI (years)Small House

35551,86299653,26%4.500€8Large House115592,385384288,38%5.500€4,5Service Office61321,86299682,38%4.500€5,3Commercial Local92611,86299694,12%4.500€3,6Occasional Apartment9511,86299619,47%4.500€17

The calculations on the above table, have been made with real consumption and generation readings with hourly accuracy, average energy prices and approximate costs of complete generation facilities for self-consumption completely installed and legalized, without taking into account any subsidies or favourable tariffs.

Subsidies and grants

There are many regions around Spain that individually set assistance scheme to encourage this type of domestic facilities, either by tax discounts or with subsidies. For example, the Valencian Community has 2 compatible incentives:

– Tax deduction of 20% to the self-consuming section of the IRPF up to 8,000 € of maximum base. That is, if your installation costs us € 8,000, you will receive a discount 20% -> € 1,600 through decrease in taxation.

– IBI discounts on homes. Many city councils encourage self-consumption facilities by offering a discount between 10 and 50% of the full city tax for a number of years. For example, Castellón discounts between 10 and 25% for 5 years.

To benefit from these incentives it is necessary that the installation successfully been through all legal procedures.

Procedures and legalization

A self-consumption installation is an electrical installation and must comply with the regulations  in order to certify it is safely and correctly operated. That is why it must be properly legalized before the official bodies and in the presence of the electrical  distribution network.

Failing to follow this procedure will put your safety at risk, can cause the receipt of a fine, your installation may not work properly, you will not be able to claim any subsidies the self-consumption installation or even, receive higher bills, if the distributor “is non-compatible” with you self-consumption system.

Using the example of the Valencian Community procedure, it is necessary to:

– Legalize the installation before the territorial service of industry to obtain the Certificate of Electrical Installation of Self-consumption (similar to the low voltage bulletin).

– Deal with the distribution company responsible for the region, IBERDROLA DISTRIBUCIÓN ELÉCTRICA, for the connection of the installation to the network.


A self-consumption installation, mainly solar photovoltaic, is viable and allows us to save a considerable amount of the electricity bill, if our consumption profile is favorable. It is advisable to obtain a personalized, site-specific study and rely on electrical professionals for its sizing, installation, legalization, commissioning and participation in subsidies and incentive shemes.

Note that the self-consumption shared for neighboring communities is on the rise, which will allow communities to share a collective installation and hence, considerably reduce the associated investment costs – compared to several individual installations of smaller scale.

On the following post we will talk about energy self-consumption focused on companies, with large power generation facilities. Do not miss it!

Also, if you wish to obtain more information on topics related to energy self-consumption, feel free to take a look in the following link, a blog managed by one of our project followers (Rafael López Peña).

Special thanks to co-author: Vicent Prats Feliu (Ing. Eléctrico) –

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