## 4 Development of the Profit Rate of an ESS-Connected PV Analysis Method  
### Development of Economical Evaluation Method  
The capacity decision method based on a basic economical evaluation was examined to develop an economical evaluation method that is optimized for a system comprising an ESS-connected PV system deployed in a building, as shown in Figure 3. The maximum power demand of the building is analyzed, followed by an analysis of the peak power curve during either summer or winter [13]. The peak power cut, which should be over 30% of the contract demand, is decided and the capacity of the PV system is chosen based on this value. Next, the PV system's generating time is calculated based on the building's location, cardinal points, and other factors. Finally, the capacity of the ESS is estimated from that data [14]. \begin{table}
\begin{tabular}{c c c c} \hline \hline
**Item** & **Capacity** & **Unit Price** & **Price [5]** \\ \hline ESS [kWh] & 586 & 340.12 & 222,680,000 \\ PCS [kW] & 250 & 40,277.83 & 40,277.83 \\ PMS & - & 40,277.83 & 40,277.83 \\ Construction Cost & - & 44,753.14 & 44,753.14 \\ PV [kW] & 200 & 1102.36 & 220,471.88 \\ Sum & - & - & 545,093.27 \\ \hline \hline \end{tabular}
\end{table} 
Table 10: Investment Cost Analysis in the Test Case. \begin{table}
\begin{tabular}{c c} \hline \hline
**Category** & **Content** \\ \hline Demand charge savings & Peak cut amount \(\times\) Unit price of demand charge \\ \hline Demand charge discount & The demand charge is discounted by three times the decline in the peak demand. \\ \hline Energy charge savings & [Discharge quantity \(\times\) (energy charge unit price of peak/mid load condition)] - [Charge quantity \(\times\) (energy charge unit price of light-load condition)] \\ \hline Energy charge discount & 50\% discount to the energy charge when off-peak hour (for ESS charging) is applied. \\ \hline Additional discount & Additional discount is applied differently for each case: If the capacity of ESS is less than 5\% of the contract demand, there are no discount: If the capacity of ESS is between 5\% and 10\% of the contract demand, additional discount that is 20\% of renewable energy discount takes place: If the capacity of ESS is greater than 10\% of the contract demand, additional discount, 50\% of renewable energy discount, takes place place \\ \hline \hline \end{tabular}
\end{table} 
Table 8: Information of the Target Building. \begin{table}
\begin{tabular}{c c c} \hline \hline
**Category** & **Item** & **Price [5]** \\ \hline Investment cost (including VAT) & 545,068.87 \\ Energy charge savings & 210,734.18 \\ Reduced by ESS capacity ratio & 107,977.69 \\ Savings(10 years) & Reduction of power-based funds & 11,792.34 \\ Sub total & 330,504.21 \\ Total savings (including VAT) & 406,195,958 \\ Payback period (years) & 17.55 \\ \hline \hline \end{tabular}
\end{table} 
Table 9: Test Result from the Case Analysis. The estimated capacity of the ESS decides the capacity of the PCS. From this, an estimate of the total electricity cost savings due to an ESS charge/discharge, the ESS base fare discount, and the discount rate for renewable energy is derived for analyzing the ROI period [15; 16]. When an economical evaluation is carried out with the conventional method, the system could be excessively designed, or optimum economic feasibility could not be achieved. This study developed an algorithm to design an optimized system without such flaws, as shown in Figure 4.  
Normally, if a system is installed with a large capacity of PV system and ESS, renewable energy generation is stimulated, which makes it more convenient; however, the installation costs escalate  
Figure 4: Development of the Economic Analysis Algorithm. Figure 3: Development of Economic Evaluation (conventional). greatly. On the other hand, if the capacities of the PV system and ESS are small, a low installation cost becomes an advantage, but their role as renewable energy providers would be diminished.