TITLE:
Tariff-Based Strategy of Energy Storage System Allocation at University Technical Malaysia Melaka with Solar Photovoltaic Systems
AUTHORS:
Junainah Sardi, Mohamad Fani Sulaima, Surina Mat Suboh
KEYWORDS:
Energy Storage System, Commercial Building, Electricity Cost, Electricity Tariff, Cost-Benefit Analysis
JOURNAL NAME:
Journal of Power and Energy Engineering,
Vol.14 No.10,
October
26,
2026
ABSTRACT: The increasing demand for reliable and sustainable energy solutions has prompted a surge in the rapid deployment of renewable energy and Energy Storage Systems (ESS). This study presents a tariff-based strategy of ESS allocation at commercial buildings with solar PV in Malaysia. This involves determining the optimal dispatch power and size of ESS for a Universiti Teknikal Malaysia Melaka (UTeM), considering various PV penetration levels and electricity tariffs. An effective ESS dispatch strategy is proposed to minimize electricity cost through maximum demand reduction, charging excess PV generation and maximizing the daily shifted energy from peak period to off-peak period. The strategy incorporates an iterative algorithm to determine daily charge and discharge thresholds, leading to a flattened demand profile. A Cost and Benefit Analysis—based optimization approach is utilized to identify the optimal capacity of ESS for maximizing the total Net Present Value (NPV) of ESS investment considering the strategic ESS scheduling. Numerical results express that the proposed strategy able to effectively dispatch and size ESS for maximizing the total profits of ESS investment. Maximum NPV is obtained when ESS of 6MW/37MWh is integrated in UTeM building with 0% PV penetration level under Time-of-Use (TOU) Tariff. While optimal ESS capacity increases with PV penetration under the general tariff, the required optimal ESS capacity under the TOU tariff decreases with higher levels of PV integration. Despite the reduction in system size at higher PV levels, the TOU tariff continues to yield substantially greater economic returns compared to the general tariff, achieving an NPV between MYR 28 million and MYR 35 million. Furthermore, the combination of TOU tariffs with the proposed optimal ESS capacity creates a more promising economic environment for ESS investments in commercial buildings with high PV penetration.