Grid-forming vs. grid-following in residential solar-plus-storage

Scientists at the Bucharest University of Economic Studies in Romania have compared the performance of grid-following (GFL) and grid-forming (GFM) inverters in residential solar-plus-storage systems under low-inertia grid conditions and have found that GFM technology offers significant advantages in terms of grid stability, frequency and voltage recovery, islanding capability, and economic returns, with a relatively short payback period for the additional investment.

The researchers explained that most existing studies focus on control design, dynamic stability, and large-scale integration, with limited attention paid to country-specific economic assessments, particularly for prosumers in emerging electricity markets such as Romania. Their study addressed this gap by combining an analysis of GFM dynamic performance, including frequency stability, voltage regulation, rate of change of frequency (RoCoF), and islanding capability, with a techno-economic assessment based on net present value (NPV), internal rate of return (IRR), adjusted levelized cost of energy (LCOE), and payback period. It also identified an indicative transition point toward inverter-dominated operation based on installed-capacity trends and long-term Romanian grid scenarios.

For the technical comparison, the researchers used MATLAB/Simulink to model a 5 kW residential PV system coupled with a 10 kWh lithium iron phosphate battery. Both inverter configurations were evaluated under identical operating conditions using detailed electromagnetic transient simulations. Two disturbances were considered: a 1.2 kW load increase and a 20% voltage sag lasting 200 milliseconds. The performance indicators included frequency deviation, voltage deviation, stabilization time, and RoCoF.

The economic assessment compared capital expenditure, operating costs, self-consumption savings, grid export revenues, and energy arbitrage. It assumed a 15-year project lifetime, a 6% discount rate, and initial investments of €7,000 ($7,851) for GFL and €8,500 for GFM. The analysis also accounted for ancillary service revenues, avoided outage costs, battery degradation, and reduced renewable energy curtailment.

The researchers found that, under GFL operation, the system relies on external grid references and primarily optimizes self-consumption and energy storage. By contrast, GFM independently establishes voltage and frequency references, enabling active grid support and islanded operation. GFM also improves power-flow management, voltage regulation, frequency stability, and continuity of supply during outages.

The simulations showed that GFM reduced maximum RoCoF from 18.99 Hz/s to 6.34 Hz/s, a decrease of approximately 66% compared with GFL. Maximum frequency deviation fell from 0.62 Hz to 0.18 Hz, while frequency settling time decreased from 7.5 seconds to 3 seconds. Maximum voltage deviation also declined from 0.20 per unit (p.u.) to 0.08 p.u., with recovery time falling from 5 seconds to 2 seconds.

The economic analysis showed that GFM achieved an annual net cash flow of €1,142, compared with €615 for GFL, reflecting additional flexibility and resilience benefits. These included ancillary service revenues, avoided outage costs, reduced curtailment, and improved energy management. GFM also achieved a positive NPV of €2,591 and an IRR of approximately 10.4%, compared with an NPV of −€1,027 and an IRR of around 3.7% for GFL.

Although GFM had a higher conventional LCOE of €0.206/kWh, compared with €0.174/kWh for GFL, its adjusted LCOE fell to €0.118/kWh when flexibility and resilience benefits were included. Under the assumed economic conditions, the additional €1,500 investment required for GFM was recovered in approximately 2.85 years.

Sensitivity analyses showed that GFM remained economically attractive across the electricity-price, ancillary-service revenue, and battery-cost scenarios examined. However, the researchers noted that its profitability depends on access to flexibility markets, the economic value assigned to grid services, and assumptions that require further validation using seasonal operating data.

“Even under unfavorable conditions such as lower electricity prices, reduced ancillary service revenues or higher battery investment costs, GFM maintains positive profitability indicators and economic viability,” the scientists said. “In contrast, GFL remains significantly more sensitive to market variations and often fails to achieve attractive financial performance.”

The researchers said future work should investigate the coordinated operation of GFM-equipped prosumers, aggregators, and energy communities, as well as artificial intelligence-based adaptive control. They also identified integration with vehicle-to-grid systems, hydrogen storage, and peer-to-peer energy trading as potential research directions to improve grid flexibility and resilience.