| Forecast Period | 2024-2028 |
| Market Size (2022) | USD 5.21 Billion |
| CAGR (2023-2028) | 20.07% |
| Fastest Growing Segment | Lithium-ion Batteries |
| Largest Market | Europe |
Market Overview
Global Residential Energy Storage Market was valued at USD 5.21 billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 20.07% through 2028.
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Key Market Drivers
Battery Energy Storage Systems Regulate Voltage and Frequency Help in Market Growth
One of the most important technologies in the shift to a sustainable energy system is battery energy storage. The battery energy storage systems combine renewable energy sources, control voltage and frequency, lower peak demand costs, and offer a backup power source. Energy storage systems rely heavily on batteries, which account for about 60% of the system's overall cost. Nevertheless, it is anticipated that batteries will only make up a minor percentage of the installed storage capacity. Lithium-ion, lead-acid, nickel-metal hydride (NiMH), nickel-cadmium (NiCD), nickel-zinc (NiZn), and flow batteries are among the different kinds of batteries utilized in energy storage systems. The market for battery energy storage is seeing a huge surge in demand for lithium-ion batteries as a result of their falling costs. Lithium-ion battery prices are predicted to drop to as low as USD 73/kWh by 2030, with the US Department of Energy (DOE) announcing an interim pricing target of USD 123/kWh by 2022. The market for battery energy storage is likewise anticipated to be dominated by lithium-ion batteries. They are lightweight, have a dependable cycle life, a high energy density relative to volume, a high charge/discharge efficiency, and minimum maintenance. Lead-acid batteries make up the majority of the energy storage market, but other battery chemistries like lithium-ion (Li-ion), sodium, and flow batteries are anticipated to offer extra advantages like greater durability or higher energy capacity for longer-term storage or other specialized uses. Additionally, the battery energy storage devices lower energy costs by using utility grids to provide customers with electricity. Additionally, utilities' battery energy storage systems are a more affordable option than traditional infrastructure, particularly when it comes to assisting substations and transmission and distribution (T&D) lines in meeting the growing demand. These elements are supporting the market expansion for battery energy storage systems.
The market for battery energy storage is currently dominated by utilities. During the projection period, there will be more opportunities for battery energy storage systems as more utilities include storage in their solar project solicitations. Furthermore, reliability is increased without generating greenhouse gas (GHG) emissions when large batteries are combined with renewable energy projects. As a result, companies and homes are putting more emphasis on using batteries for backup power and harvesting extra energy from rooftop systems when needed. The adoption of battery storage has so far been focused on a few industrialized economies in Europe, Central Asia, East Asia-Pacific, and North America. The main causes of the expanding use of battery energy storage in these areas are the rising percentages of renewable energy sources and the deteriorating grid infrastructure.
India wants to have 275 GW of wind and solar power overall by 2027, along with 15 GW of nuclear and 72 GW of hydropower. By 2027, it is anticipated that 43% of installed capacity will come from renewable sources. The need for energy storage devices to solve the issues associated with intermittency in renewable power generation is anticipated to increase as the renewable energy sector expands.
Key Market Challenges
Costs and Return on InvestmentResidential energy storage systems might have a comparatively high initial cost, which includes installation and batteries. Even while long-term cost savings are achievable, some homeowners still struggle to get a fair return on investment (ROI).
Battery longevity and DegradationTwo important aspects of battery systems are their longevity and degradation. Battery performance may deteriorate over time, impacting the system's overall effectiveness and storage capacity. Making sure batteries are strong and long-lasting is crucial.
Regulatory BarriersPolicies and regulations pertaining to energy storage, such as tariffs, incentives, and grid connection guidelines, differ from one area to the next. Complicated rules may limit acceptance and impede market expansion.
Technical DifficultiesTechnical know-how is needed to integrate energy storage devices with current electricity and solar installations. Some homeowners may find compatibility, installation, and upkeep difficult.
Environmental IssuesBattery system manufacturing, disposal, and recycling give rise to environmental issues. Reducing the ecological impact of these systems requires ensuring their sustainable lifespan.
Perception and AwarenessA lot of homeowners may still be ignorant of the advantages of home energy storage and think it's complicated or too expensive. Market expansion can be fueled by raising customer knowledge and educating them about the benefits.
rivalry and Market FragmentationThe market is fragmented with different technologies and providers as a result of greater rivalry brought on by the growing interest in domestic energy storage. With so many possibilities, it might be difficult for customers to choose the best one.
To sum up, the worldwide home energy storage market offers a bright future full of chances to transform energy use, cut expenses, and improve energy sustainability. But for the market to realize its full potential, issues including startup costs, battery longevity, legal restrictions, and technical difficulties need to be resolved. The future of sustainable energy use at the household level may be significantly shaped by domestic energy storage systems as technology develops and stakeholders work together to solve these obstacles.
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Key Market Trends
Battery Advancements in the Market
Batteries are essential to energy storage systems and account for a significant amount of the system's overall cost, particularly when it comes to residential energy storage systems. Both the installation of solar roofs on residential structures and the overall installed capacity of renewable energy sources are growing significantly on a global scale. The demand for battery energy storage is probably going to rise in tandem with the expansion of rooftop solar capacity. Thus, it is anticipated that over the projection period, the development of novel energy storage systems (ESS) for residential applications will increase demand for lithium-ion batteries. Lithium-ion batteries are preferred for this application due to their characteristics, which include reduced weight, quick charging, increased charge cycles, and decreasing cost. Lithium-ion batteries have been the preferred battery storage option for home inverters and residential solar systems in recent years due to their falling costs. The cost of a lithium-ion battery dropped by 81.58% from USD 668/KWh in 2013 to USD 123/kWh in 2021. Residential energy storage regulations are still in their infancy. Nonetheless, nations like the US and Germany are opening up local energy storage markets through regulatory and policy initiatives. For example, the US Department of Energy (D.O.E.) declared in June 2021 that it would immediately implement a policy to increase the domestic manufacturing supply chain for innovative battery technologies and materials.
Segmental Insights
Technology Type Insights
Lithium-ion (Li-ion) batteries allow the same ampere-hours to enter and exit, making them virtually 100% efficient during charging and discharging. Compared to other technologies, such lead-acid batteries, these batteries have a number of technical advantages. Unlike lead-acid batteries, which have an average lifespan of 400–500 cycles, rechargeable Li-ion batteries have an average lifespan of over 5,000 cycles. Li-ion batteries are more stable and can be recharged many times. Additionally, compared to other rechargeable batteries, they often have a better energy density, a higher voltage capacity, and a lower rate of self-discharge. Because a single cell retains charge longer than other battery types, this increases power efficiency. Furthermore, compared to lead acid batteries, Li-ion batteries require less upkeep and replacement. While the voltage of lead-acid batteries steadily decreases during the discharge cycle, Li-ion batteries sustain their voltage throughout, enabling higher and longer-lasting electrical component efficiency. Li-ion batteries are more expensive initially, but when longevity and performance are taken into account, the real cost is significantly lower than that of lead-acid batteries. Lithium-ion battery technology is therefore anticipated to dominate the worldwide residential energy storage systems market over the projected period, based on the above mentioned facts.
Regional Insights
The Europe region has established itself as the leader in the
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Recent Developments
- February 2022The partnership between FIMER and Vega Solar supplied 14 PVS-100 inverters, a three-phase string solution, to Albania. The PVS-100/120-TL is a cloud-connected three-phase string inverter by FIMER designed for cost-effective decentralized solar systems on both ground and rooftops.
- May 2022Salient Energy, a company developing proprietary zinc-ion batteries as an alternative to lithium-ion batteries in residential energy storage, announced that it had formalized a partnership with Horton World Solutions (HWS), a sustainable homebuilder whose proprietary composite framing system enables best-in-class energy efficiency and construction time.
- In May 2022, Mango Power launched Mango Power M Series at the Intersolar Munich 2022. The system can be used with a solar PV, with a 10-20 kWh battery for daily and emergency use. The system supports single and triple-phase connections with 8-14 kW output capability. The system can be used in various applications, including a built-in inverter, backup gateway, and EV charger. The company launched different versions for the United States and Europe markets.
- In June 2022, Toyota entered the energy storage market with the launch of the O-Uchi Kyuden System, a residential battery product. Toyota launched a rated output of 5.5 kWh and rated capacity of 8.7 kWh battery storage system, which uses the company’s electric vehicle battery technology. When connected to a photovoltaic rooftop system, the system can power a home day and night. Initially, the company aims to sell the storage system in Japan.
Key Market Players
- Tesla, Inc.
- LG Chem Ltd.
- Sonnen GmbH
- Enphase Energy, Inc
- Sunrun Inc
- Panasonic Corporation
- Orison
- Eguana Technologies Inc
- Pika Energy
- BYD Company Limited
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