Minimizing electricity costs by sharing energy in sustainable microgrids

Buildings account for over 75% of the electricity consumption in the United States. To reduce electricity usage and peak demand, many utilities are introducing market-based time-of-use (TOU) pricing models. In parallel, government programs that increase the fraction of renewable energy are incentivizing residential consumers to adopt on-site renewables and energy storage. Connecting on-site renewables and energy storage between homes forms a sustainable microgrid capable of generating, storing, and sharing electricity to balance local generation and consumption in residential areas. In this paper, we investigate how to minimize the costs of electricity from a utility for a microgrid under market-based TOU pricing models. In particular, we (i) present a system architecture for an energy-sharing microgrid; and (ii) develop optimal energy-sharing algorithms for homes within the microgrid. We conduct an extensive evaluation under two typical TOU pricing models that use data from more than 40 homes. Our results indicate that our system reduces the costs of Alternating Current (AC) electricity by 20%, even for homes with similar energy usage patterns.