Attractiveness of small-scale residential photovoltaic systems through investment profitability in five EU markets

This study assesses the investment profitability of small-scale residential photovoltaic (PV) systems across five European Union (EU) member states: Spain, Italy, Greece, France and Austria. By modeling households in high solar potential regions, namely Madrid, Naples, Athens, Nice and Carinthia, the analysis evaluates the economic viability of a 5 kW P PV system with and without a 10 kWh battery storage, over a 20-year operational lifespan. The findings confirm that PV system investments are profitable in all assessed locations, with profitability strongly influenced by local financial support schemes, electricity prices and market conditions. Greece emerges as the most profitable location driven by high feed-in tariffs, while Austria lags behind due to lower PV yields and limited financial incentives. The inclusion of battery storage enhances profitability in some locations but reduces it in others, underscoring the importance of context-specific policy design. Regulatory instruments, such as feed-in tariffs and subsidies, are identified as critical drivers of residential PV adoption. To sustain the growth of residential PV systems and meet the ambitious targets of the European Green Deal and REPowerEU plan, policymakers must ensure regulatory stability and adapt support mechanisms to evolving market conditions. Furthermore, non-economic barriers which were not fully addressed in this study need to be considered to further promote residential PV adoption.