In recent years, the global energy storage and household battery storage market has developed rapidly. Its main developments are concentrated in several leading markets including Germany, Italy, Japan, the United States and Australia. Let’s take a closer look at the situation in several leading countries where the household battery energy storage market is developing rapidly.
Germany
Germany is the earliest large-scale household battery market. In May 2013, the German government launched a subsidy program administered by KfW that provides subsidies for energy storage systems installed alongside new or existing photovoltaic energy storage under 30kW. This has propelled Germany into the world’s largest market for residential solar and batteries, with installation rates remaining stable even as subsidies have been reduced year by year.
In 2022, the installation rate of rooftop solar cells will exceed 75%, one of the highest installation rates in the world.
Subsidies have supported the market’s growth for more than a decade, but they have slowly shrunk and are no longer the main driver. Instead, the market is now driven by customers committed to increasing on-site solar usage. Because they can save more than 0.30 euros per kilowatt hour in electricity bills by purchasing electricity from the grid, while the cost of exporting solar power is less than 0.05 euros per kilowatt hour.
Italy
In 2022, Italy will become the second largest market, accounting for more than 20% of the global new market in 2021 and 2022. In 2022, the adoption rate of rooftop solar cells is 77%, up from 11% in 2018. This follows the launch of Italy’s extremely generous “Super Bonus” subsidy program in 2020, which covers 110% of all home energy improvement-related costs.
After the program launched in 2020, adoption rates increased dramatically. But after the “super bonus” program was scaled back in early 2023, adoption rates suddenly dropped. Unlike Germany, the Italian government quickly withdrew this support program, and the market was unable to sustain growth without the program.
BNEF expects adoption rates to remain moderate. The 50% state tax rebate scheme remains in place, which had already given a boost to a number of projects across Italy before the “super bonus” scheme was introduced. Consumers also receive regional subsidies. For example, in Lombardy, solar battery products enjoy a 50% tax rebate starting from 2016.
USA
The U.S. residential battery market is very fragmented, as state-level policies are the largest determinant of battery adoption and can vary widely.
California, Florida and Texas are the markets with the largest number of system installations, with installation rates of 9%-12% in 2022 and expected to rise significantly in 2023. Installation rates in these markets are primarily driven by demand for backup power, and grid disruptions due to extreme weather events are becoming a huge concern for customers.
California, in particular, has emerged as an attractive market over the past year due to changes in solar net metering policies that encourage consumers to pair batteries with existing PV systems. As for household battery, you can click our 51.2V 200Ah Powerwall Battery to learn more.
Demand in California is also supported by the California Self-Generation Incentive Program, which provides subsidies of $150-$1,000/kWh for residential batteries.
Although Hawaii is a smaller market in terms of the number of systems installed, its installation rate is among the highest in the country. Since power companies only allow utility systems to transmit power to the grid, about 96% of residential PV installations will be equipped with batteries in 2022. Consumers are even more motivated to install batteries through targeted subsidies provided by the Hawaii Battery Bonus Program.
U.S. adoption is expected to increase over the next five years due to more frequent outages, lower prices for rooftop solar output, the introduction of time-based evening peak retail electricity prices, higher peak demand charges, and demand response compensation.
Japan
Driven by subsidy programs, the household battery market has become Japan’s largest energy storage market, with newly installed batteries receiving subsidies of up to 37,000 yen ($250)/kWh.
Many Japanese households with solar modules installed will end their initial 10-year feed-in-tariff contracts in 2023-2030, so the remuneration (if any) they receive for exporting solar power will be significantly less, meaning people have to add existing self-consumption PV systems. motivation.
Australia
Australia’s growing household battery market has been spurred by soaring electricity prices in many states, subsidies and resilience issues. Nationwide, cell adoption in new photovoltaic installations will jump to nearly 15% in 2022 from about 8% in 2021. Installation rates remain relatively low compared to European markets as the continued use of feed-in tariffs (transmission payments provided by retailers) limits solar adoption.
While most Australian solar owners receive flat transmission payments, starting in Victoria, electricity retailers are introducing time-varying rates, which is promising for batteries.
Under this scheme, these owners could be paid higher or lower depending on the time of day they export solar power to the grid, which would encourage them to install batteries to store excess solar power during the day and export it at night when prices are typically higher. Other Australian states are likely to follow suit, starting with South Australia. The state has been exploring rates for different time periods since 2020.
China
China’s household battery market has struggled to take off due to China’s relatively low electricity rates and limited concerns about energy supply resilience (low blackout rates).
In the first half of 2023, the average electricity price for Chinese households was less than 0.530 yuan ($0.076)/kWh, which is approximately equivalent to 50% of the average U.S. household electricity price and 15% of the German household electricity price.
Due to cross-subsidies from industrial and commercial end-users, household electricity prices in China are artificially low. Low electricity prices make consumer energy storage projects economically unattractive.
For China’s electricity users, the losses caused by grid outages are also less worrying, which also reduces the emphasis on energy storage. Without further incentives, China’s household energy storage market is expected to remain small by 2030.
Conclusion
In summary, the global home battery energy storage market has experienced significant growth in recent years. Each country has its own unique factors affecting the market, including government subsidies, solar adoption rates, grid outages and electricity price structures.
While some markets have experienced steady growth on the back of continued incentives, others have experienced volatility due to changes in subsidy programs. Looking ahead, adoption of residential battery systems is expected to increase globally as concerns about grid resilience, rising electricity prices and renewable energy storage continue to drive demand.
However, challenges such as different national policies, pricing restrictions, and low electricity prices in certain regions may affect the growth potential of the household battery market.
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