Residential Energy Storage Systems Market - Growth, Trends, and Forecast (2020 - 2025)
The market is segmented by Technology Type (Lithium Ion (Li-ion) Batteries, Lead-acid Batteries, and Others), and Geography (Asia-Pacific, North America, Europe, Middle-East and Africa, and South America)
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Scope of the Report
Key Market Trends
TABLE OF CONTENTS
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The market for residential energy storage systems (RESS) is expected to grow at a CAGR of approximately 35.2% during the forecast period of 2020 – 2025. Factors such as increasing demand for uninterrupted and reliable power supply, and the rise in adoption of solar rooftop systems by the residential sector are expected to be the major drivers for the market studied. However, the high installation cost for solar plus battery systems is expected to hinder the growth of the residential energy storage systems market in the coming years.
Lithium–ion battery-based energy storage systems (ESS) accounted for the highest market share in 2018, and is expected to dominate the market during the forecast period.
The residential energy storage systems market is majorly dominated by Germany, the United States, and Australia. However, several other countries, such as Brazil, Saudi Arabia, Thailand, and Bangladesh have introduced the net metering program and have made certain amendments in the program to encourage solar PV in the residential sector. This, in turn, is expected to create an ample opportunity for the residential energy storage systems market in the future.
At regional level, Europe has dominated the RESS market in 2018 with majority of the demand coming from the countries such as Germany, the United Kingdom, and France.
Scope of the Report
The residential energy storage systems market report include:
Lithium Ion (Li-ion) Batteries
Middle-East and Africa
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Key Market Trends
Increasing Demand for Lithium–ion Battery-based ESS
The lithium-ion-based energy storage systems accounted for more than 50% of the market share in 2018 and are expected to continue its dominance over the forecast period. Lithium-ion (Li-ion) batteries offer various technical advantages over other technologies, such as lead-acid batteries. Rechargeable Li-ion batteries, on an average, offer cycles more than 5000 times, in comparison to lead acid batteries that last for around 400-500 times.
The adoption of Li-ion batteries has been increasing, primarily due to their property of being the most energetic rechargeable batteries available. Also, the use of Li-ion batteries is increasing, as it is replacing conventional batteries due to its techno-economic benefits.
Battery manufacturers are working to reduce the cost of Li-ion technology. The price of lithium-ion batteries has fallen steeply in the past 10 years. In 2018, the lithium-ion battery price was USD 176 per kWh, 84% lower than the price in 2010. Lithium-ion battery prices are falling continuously and are down by nearly 18% in 2018 from 2017 levels. This sharp and sustained cost reduction is expected to help cement lithium-ion as the battery chemistry of choice in all energy storage markets, including residential energy storage.
Furthermore, the decline in average lithium-ion battery prices is expected to continue and reach approximately USD 100/kWh by 2025, which, in turn, would make it much more cost-competitive, with respect to other battery types. This, in turn, would result in an increased application of lithium-ion batteries in new and exciting markets, such as energy storage systems (ESS), paired with renewables like solar, wind, or hydro, for both residential and commercial applications, during the forecast period.
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Europe to Dominate the Market
Europe has dominated the RESS market in 2018 and is expected to continue its dominance in the coming years. The demand for RESS in the region is witnessing high growth, owing to the rapid adoption rooftop solar power.
The residential energy storage system market has grown rapidly in Germany since 2015, supported by an incentive scheme granting 30% investment subsidy for the battery system.
As of March 2018, residential energy storage systems market in Germany has grown by 131% since 2015. In 2018, the market worth exceeds USD 600 million with nearly 500 MWh of storage capacity spread across roughly 90,000 installations.
Transformation in Germany’s energy mix has been taking place for the past few years. Rooftop solar accounted for almost 74% of the total solar energy generation in Germany in 2017, mainly due to advanced supporting mechanisms introduced in the past such as grants and loans for roof programs.
Moreover, the government of the United Kingdom is also promoting the adoption of battery energy storage to meet local, regional and international carbon emission reduction goal.
To boost the adoption of residential energy storage system, the government of UK in 2017 agreed to reduce tax for installation of battery system (excluding retrofit products), only if they are supplied and installed alongside solar panels. The VAT has been reduced to 5% on battery storage instead of the standard 20% currently applied.
The RESS market in the region is also driven by the import of low-cost solar panels from China, which is helping in making photovoltaic technology more competitive.
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The global residential energy storage systems market is consolidated. Some of the key players in this market include LG Chem Ltd, Samsung SDI Co. Ltd, Panasonic Corporation, Sonnen GmbH, and Saft Groupe SA.