In the past year, the rapid increase in electricity costs in Europe has prompted active efforts in energy structure transformation in Europe and the United States. The introduction of relevant tax incentives has enhanced the economic viability of solar-plus-storage systems.
Currently, in the solar residential market, there is a strong demand for residential photovoltaic (PV) paired energy storage systems. Considering the cumulative and additional installed capacity of residential PV, it is expected that the demand for residential energy storage will continue to grow. The overseas energy storage market is experiencing high-speed development, mainly concentrated in two major areas: residential storage and portable energy storage. Europe and the United States are leading the global residential energy storage installations, each occupying approximately 1/4 of the market. The main driving factors for the previous rapid development include:
- Geopolitical Factors: Influenced by geopolitical conflicts, low energy self-sufficiency rates, and rising electricity prices have driven the rapid increase in residential energy storage penetration.
- Building Structure: Overseas buildings are mostly low-rise independent structures, making the construction of energy storage installations less challenging and easy to install.
- Portable Energy Storage: Dominated by European, American, and Japanese countries, primarily due to the early prevalence of outdoor culture and, in some regions, the geographical environment, making locals inclined to have backup power in advance.
Due to the immaturity of domestic energy storage business models, the overseas market has become a battleground for Chinese brands to pursue profits. By entering the overseas market, overall revenue, gross profit, and brand value can be enhanced.
Driven by economic factors, the demand for residential energy storage continues to be strong. Both residential and portable energy storage have consumer-oriented attributes.
Professionalism and safety are the core competitive factors for integrators. A comprehensive and complete after-sales service and brand dominance are crucial for high market share and long-term development.
Portable energy storage is mainly used in outdoor activities and emergency power. It fills the gap between power banks and diesel generators. Product design and safety become core competitive factors for brands.
Portable energy storage products have higher penetration rates in European and American countries, and the market is expected to grow at a rate of around 40% in the next 5 years.
In 2022, catalyzed by a significant increase in residential electricity prices, the European region witnessed a surge in the newly installed capacity of residential energy storage. Although residential electricity prices in Europe have fallen from their peaks, they still remain relatively high, supporting the economic viability of residential solar-plus-storage systems.
Moreover, after experiencing the European energy crisis, residents have developed awareness and consumption habits regarding residential solar-plus-storage systems. The penetration rate of residential energy storage is expected to continue to rise.
In addition, at the policy level, favorable factors such as Germany’s reduction of value-added tax on residential energy storage and Italy’s reduction of tax credit limits will continue to support the further increase in demand. In this scenario, the demand for residential energy storage in Europe is expected to continue growing. According to data from Jibang Consulting, Europe’s residential energy storage added 1.3 GWh in 2020, and it is expected to reach 13.1 GWh by 2026, driven by rapid policy-driven energy independence and market expansion.
The backup power demand in the U.S. opens up space in the residential energy storage market. Due to frequent power outages, U.S. residents have a strong demand for electrical safety and independence. In this context, residential energy storage systems have taken on the attributes of “home appliances” for U.S. residents.
Furthermore, with the gradual decline of net metering policies and the introduction of residential energy storage subsidies in various states, it is expected to jointly drive the upswing in demand for residential energy storage in the United States.
Global Residential Storage Market: Blossoming on Multiple Fronts
Looking at the global market, energy storage demand has already blossomed on multiple fronts. Apart from major markets such as Europe and the United States, residential energy storage markets in various countries worldwide are also driven by different factors.
In Australia, residential energy storage has already achieved a certain level of economic viability. Rapid development in rooftop solar in Australia, where solar generation accounts for 8.1% of the national total, has highlighted issues with local grid integration. Installing residential energy storage has become an effective solution, and it is expected that the proportion of new installations of solar-plus-storage systems in Australia will remain high, driving positive trends in residential energy storage demand.
On the user side of energy storage, according to data from the Clean Energy Regulator (CER) in Australia, as of August 2022, the total number of registered small systems installed in Australia has increased to 50,270 sets, with only 1.6% of rooftop solar households installing batteries. The increase in retail electricity prices and the decreasing investment costs of battery energy storage are expected to prompt more users to install rooftop solar and battery storage.
In South Africa, the problem of electricity shortages is prominent, requiring increased investment in electricity and energy storage. According to World Bank predictions, the cumulative installed capacity of energy storage batteries in South Africa is expected to grow 30-55 times between 2020 and 2030, entering a phase of vigorous development.