Residential Energy Storage Market

The global Residential Energy Storage Market is valued at USD 890.1 Million in 2023 and is projected to reach a value of USD 3918.2 Million by 2032 at a CAGR (Compound Annual Growth Rate) of 17.9% between 2024 and 2032.

Key highlights of Residential Energy Storage Market

• Europe dominated the market in 2023, obtaining the largest revenue share of more than 41.3%
• In 2023, the North America region had a substantial market share and will witness remarkable growth during the forecast period
• Lithium-ion segment dominated the market with largest market share of 81.2% in 2023
• The 6kW to <10kW segment continued to assert its dominance by utility, capturing the largest market share of 52.5% in 2023
• Customer-owned dominated the market with a significant market share in 2023
• The growing adoption of distributed energy resources, such as rooftop solar installations, and the rise of smart home technologies are driving the integration of energy storage systems into residential settings

Residential Energy Storage Market: Regional Overview

Europe Dominated Sales with a 41.3% share in 2023. Europe's residential battery installations surged 83% in 2022, with Germany leading the way. Germany emerged as a leader in residential energy storage, driven by a robust incentive scheme offering a 30% investment subsidy for battery systems and supported by regulatory mechanisms fostering rooftop solar adoption. Germany remains the frontrunner in battery storage, followed by Italy, Austria, the UK, and Switzerland. The European Commission's launch of REPowerEU in May 2022 aims to reduce energy dependence and advance decarbonization, acknowledging the importance of energy storage in achieving long-term energy targets. The increasing popularity of solar battery-powered homes across Europe further underscores the region's collective shift towards cleaner energy sources and decentralized energy systems. For instance, solar-powered homes are gaining traction across the continent, with total residential battery capacity expected to reach 9.3 GWh by the end of 2022, powering over 1 million households. Also, Italy introduced a lucrative super bonus incentive scheme incentivizing energy efficiency interventions, including PV and storage system installations.

U.S. Residential Energy Storage Market Overview

The US Residential Energy Storage market, valued at USD 259.9 Million in 2023 to USD 996.27 Million in 2032, is anticipated to grow at a CAGR of 16.1% from 2024 to 2032. Homeowners' inclination for increased resiliency, shifts in net metering programs, and the financial advantages of installation, the Residential Energy Storage market in the United States has witnessed significant growth. In 2020, Tesla's market dominance was complemented by substantial sales growth from smaller domestic producers, with the Tesla 13.5 kWh Powerwall emerging as the preferred choice among consumers. The surge in photovoltaic (PV) installations can be attributed to the growing demand for backup power in response to power outages and adjustments in utility net metering and rate structures, which have enhanced the financial incentives for energy storage adoption. Technological advancements, such as smart energy management systems and lithium-ion battery innovations, improve the efficiency and appeal of Residential Energy Storage market.

The global Residential Energy Storage market can be categorized as Technology, Utility, Connectivity Type, Ownership Type, Operation Type and Region.

Residential Energy Storage Market: Technology Overview

In 2023, the Lithium-ion segment dominated the market with the largest market share of 81.2%. The Residential Energy Storage market, segmented by the technology, includes Lead-acid, Lithium-ion. Li-ion batteries, characterized by enhanced stability, higher energy density, voltage capacity, and lower self-discharge rates, exhibit prolonged charge retention, ensuring greater power efficiency and reduced maintenance needs. Despite higher initial costs, Li-ion batteries offer superior lifespan and performance, making them more cost-effective. Lithium-ion (Li-ion) batteries boast nearly 100% efficiency in charge and discharge cycles, offering superior technical advantages compared to lead-acid batteries, with rechargeable Li-ion batteries lasting over 5,000 cycles.

As key components in energy storage systems, particularly in residential applications, the surge in renewable energy installations, notably solar rooftops, is driving demand for battery energy storage. The declining costs of Li-ion batteries, with prices plummeting from USD 668/kWh in 2013 to USD 101/kWh in 2023, have propelled their adoption in residential home and solar inverters. Moreover, supportive policies and regulatory initiatives, such as the United States Department of Energy's efforts to bolster domestic manufacturing chains for advanced battery materials and technologies, are creating further opportunities in the Residential Energy Storage market.

Residential Energy Storage Market: Utility Overview

In 2023, the 6kW to <10kW segment accounted for the largest market share of 52.5%. The Utility segment is divided into 3kW to <6kW, 6kW to <10kW, 10kW to 29kW. There is a broader trend towards medium-sized energy storage solutions that balance capacity, affordability, and functionality for residential consumers. These systems are highly versatile, catering to the diverse energy needs of households while accommodating various renewable energy sources like solar power. The increase in demand can be attributed to several factors, including the growing adoption of distributed energy resources, increasing awareness of environmental sustainability, and the desire for greater energy autonomy among homeowners.

Residential Energy Storage Market: Ownership Type Overview

The Customer-owned segment had a significant market share in 2023. The Ownership Type segment is divided into Customer-owned, Utility-owned, Third-party owned. The growing trend of homeowners taking control of their energy consumption and production through the ownership of energy storage systems. With increasing awareness of energy independence, grid resilience, and environmental sustainability, more consumers invest in customer-owned energy storage solutions. By owning these systems, homeowners can optimize their energy usage, reduce reliance on traditional grid sources, and save on energy costs over time. The strong market presence of the Customer-owned segment reflects a fundamental shift towards decentralized energy management. It highlights the evolving role of consumers in shaping the future of residential energy storage.

Key Trends

• Demand for domestic energy storage systems is being driven by an increasing emphasis on sustainability and the integration of renewable energy sources, as homeowners aim to attain energy independence and minimize their carbon footprint.
• Technological advancements, such as improved battery chemistry, energy management systems, and smart grid integration, are enhancing the efficiency and capabilities of residential energy storage systems, making them more attractive and accessible to consumers.
• There's a trend towards modular and scalable energy storage solutions, allowing homeowners to quickly expand their storage capacity as needed.
• Favorable government policies, incentives, and declining battery costs are expected to accelerate market growth and adoption of residential energy storage solutions in the coming years.

Premium Insights

The increasing demand for energy independence and persistence among homeowners, driven by concerns over grid reliability, power outages, and rising energy costs, boosts the Residential Energy Storage market. Additionally, government policies, subsidies, and laws are also stimulating the adoption of renewable energy and lower carbon emissions. For instance, In August 2023, the Ministry of Power released the National Framework for Promoting Energy Storage Systems, stressing their role in ensuring consistent power supply and system reliability. Technological advancements in energy storage technologies, particularly lithium-ion batteries, have improved performance, efficiency, and cost-effectiveness, further accelerating Residential Energy Storage market growth.

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Market Dynamics

The rising demand for electric vehicles (EV) is driving the Residential Energy Storage market as homeowners seek to accommodate the charging needs of their EVs efficiently

The increasing household adoption of electric vehicles leads to surge in demand for home charging solutions, spurring the installation of residential energy storage systems to manage EV charging schedules, optimize energy usage, and lower electricity costs. For instance, sales of EVs surpassed 10 million, accounting for 14% of all newly sold vehicles. This represents a significant increase from 9% in 2021 and less than 5% in 2020. As a result, in 2022, there were over 26 million electric vehicles on the road worldwide, a 60% increase from 2021. Additionally, consumers are shifting towards home charging stations, so companies like Tata Power have an extensive EV charger network that has installed more than 23,500 residential chargers.

The growing set up of solar photovoltaic (PV) modules creates an opportunity that complements residential power storage structures

Solar PV installations offer a renewable energy supply that may be stored in batteries for after use, reducing dependency at the grid and reducing electricity bills. As more households adopt solar PV technology, there is increasing demand for energy storage systems to store excess solar energy and ensure energy autonomy is expected to rise, presenting a significant opportunity for Residential Energy Storage market growth.

One of the challenges facing the Residential Energy Storage market is the aging of lithium-ion batteries, which are commonly used in residential energy storage systems

Lithium-ion batteries degrade over time, leading to a decrease in capacity and performance. Battery aging presents a challenge for homeowners, as they may need to invest in maintenance or replacement to maintain optimal system performance.in order to meet this challenge and make sure the long-term viability of residential energy storage solutions, continuous research and improvement is needed to boom battery durability and reliability.

Competitive Landscape

The Residential Energy Storage market is highly competitive, characterized by a wide range of competitors seeking to take the lead in this emerging market. Key players such as Tesla, Panasonic Holdings Corporation, and BYD Company Ltd from various global regions like the US, Japan, and China are prominent contenders. European firms like Sonnen GmbH, VARTA AG, and SMA Solar Technology AG contribute to the competitive mix. Other notable participants, representing a variety of technological expertise and geographical coverage, are Huawei Technologies Co., Ltd., Enphase Energy, Delta Electronics, Inc., and LG Energy Solution. In addition, the market is home to up-and-coming companies like GoodWe, E3/DC, and Alpha ESS Co., Ltd., which highlights how fiercely competitive is the Residential Energy Storage industry.

The key players in the global Residential Energy Storage market include - Tesla, Panasonic Holdings Corporation, BYD Company Ltd, Enphase Energy, Sonnen GmbH, VARTA AG, Delta Electronics, Inc., Huawei Technologies Co., Ltd., Eaton, SMA Solar Technology AG, LG Energy Solution, GoodWe, E3/DC, Alpha ESS Co., Ltd, RCT-Power, SOLARWATT, SENEC, Shanghai PYTES Energy Co., Ltd, Pylon Technologies, Co. Ltd, Victron Energy, Dyness, TESVOLT AG, Turbo Energy - Solar Innovation, BST POWER (SHENZHEN) LIMITED, WeCo srl, Powervault among others.

Recent Market Developments

• In August 2022, Tesla teamed up with Green Mountain Power (GMP) to implement Powerwalls, its home battery pack, decentralized with electric utilities. One of the early users of Tesla Powerwall was a relatively modest electric company in Vermont.
• In 2022, A (MoU) Memorandum of Understanding was signed between Huawei Digital Power and Pinggao Group Co., Ltd to enhance their collaboration in the provision of cutting-edge and dependable Huawei string inverters for photovoltaic facilities in Balkan nations like Greece, Bulgaria, and North Macedonia.
• Enphase Energy announced that in 2022, the collaboration between Enphase Energy and Swell Energy will allow Enphase Energy Systems, which are powered by IQTM Microinverters and IQTM Batteries, to participate in Swell's distributed virtual power plant (VPP) programs in California, New York, and Hawaii.
• In 2022, at Intersolar Munich, Mango Power introduced the Mango Power M Series. For daily and emergency use, the system can be utilized with solar PV and a battery ranging from 10 to 20 kWh. With an output capacity of 8–14 kW, the system is compatible with single—and triple-phase connections. The system has multiple uses, such as an integrated inverter, EV charger, and backup gateway.
• In June 2022, Toyota introduced the O-Uchi Kyuden System, a home battery solution, to the energy storage market. Using its electric car battery technology, Toyota introduced a battery storage system with a rated output of 5.5 kWh and a rated capacity of 8.7 kWh. When coupled to a photovoltaic rooftop system, the system can power a residence day and night. The company's initial goal is to sell storage solutions in Japan.