Residential Energy Storage Market by Power Rating (3-6 kW, 6-10 kW, 10-20 kW), Connectivity (On-Grid, Off-Grid), Technology (Lead-Acid, Lithium-Ion), Ownership (Customer, Utility, Third-Party), Operation (Standalone, Solar), Region - Global Forecast to 2028
[291 Pages Report] The market for residential energy storage is expected to witness significant growth, with an estimated value of USD 898 million in 2023 and a projected reach of USD 2,081 million by 2028, exhibiting a Compound Annual Growth Rate (CAGR) of 18.3%. This growth is primarily fueled by the increasing adoption of digitalized oilfield communications, which is leading to market consolidation.
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Market Dynamics
Driver: Significant demand for electric vehicles
The increasing demand for electric vehicles and the expanding deployment of virtual power plants are key drivers behind the growth of the energy storage market. Electric vehicles, which serve as a significant application area, have the potential to drive the widespread adoption of energy storage solutions in residential settings. The rising utilization of electric vehicles in Europe and North America further amplifies the demand for energy storage systems in these regions.
In the grid services market, there exists an imbalance that puts solar-battery-electric vehicle (EV) systems at a disadvantage. This market offers incentives for electricity generation and storage, which play a crucial role in balancing network demand and supply in real time. However, the current structure of these markets unfairly favors large conventional power plants, often due to codes that impose high certification costs on small energy assets. In contrast, electric vehicles have the potential to become a significant source of grid stability in the future, as they represent a massive, yet largely untapped, grid-connected energy resource. To illustrate, certain battery providers like Moixa (UK) and PowerVault (US) in the UK offer household consumers an annual fee in exchange for accessing their batteries to provide aggregated grid management services.
Governments are encouraging electric vehicle owners to install energy storage batteries at home in response to the significant strain placed on the current grid infrastructure due to the increased adoption of electric vehicles. These energy storage batteries enable homeowners to charge their electric vehicles while alleviating the burden on the grid. The surge in electric vehicle sales is a key factor driving the installation of energy storage batteries in residential settings, particularly for utilizing off-peak power for charging purposes. Countries such as the US, the UK, the Netherlands, Norway, and China are witnessing a growing use of electric vehicles. Consequently, there is a strong emphasis on establishing battery-based charging platforms for electric vehicles, which in turn promotes the growth of the residential energy storage market.
Restraints: High initial investment
The widespread adoption of battery-powered energy storage systems is currently restricted due to the significant capital expenditure involved. Capital expenses encompass various costs such as raw materials, material processing, system manufacturing, and plant operations, among others. The price of battery packs is primarily attributed to raw materials, constituting approximately 75% of the total cost, while manufacturing and other expenses account for the remaining 25%.
The cost of installing residential grid-connected solar panels combined with lithium-ion batteries can range from USD 7,000 to USD 14,000. On the other hand, small-capacity lead-acid batteries, priced at around USD 200, are commonly utilized as emergency backup power for recreational vehicles (RVs). While the cost of solar batteries has decreased recently, they still remain relatively expensive, posing a financial challenge for many prospective customers with limited funds. Despite qualifying for the 30% federal tax credit for solar energy and additional incentives offered by some states, the overall capital investment required for energy storage systems remains considerably high. As a result, the adoption of energy storage systems by residential users is constrained.
Opportunities: Increasing installation of solar PV modules
Solar PV modules and energy storage systems are valuable resources during power outages as they can provide backup power. Their functionality ensures the continuous operation of critical facilities, enabling essential services like communication and device charging (mobile phones, laptops), as well as maintaining summer air conditioning. In addition to this, microgrids and small-scale applications, including portable power units, can derive significant benefits from the integration of solar and storage systems. The increasing demand for solar PV systems can be attributed to the accelerated adoption of residential energy storage systems. These systems not only contribute to energy bill savings but also align with supportive government policies, guaranteeing a consistent power supply in the event of power outages.
The residential PV installations are experiencing a surge in popularity, primarily driven by favorable government policies and funding support. For instance, in 2020, China conducted online bidding for residential solar PV projects with an installed capacity of 9 to 10 GW. The solar PV module market witnessed significant growth in 2020, doubling its size compared to 2019, as developers rushed to take advantage of generous feed-in tariff (FIT) schemes that were expected to expire in 2021. In Europe, residential PV installations are steadily growing, particularly in Germany with a focus on self-consumption, as well as in the Netherlands and Poland with the implementation of net metering programs.
Challenges: Aging of lithium-ion batteries
Despite notable advancements and enhancements, there is a significant drawback associated with lithium-ion battery technology, which is the issue of aging. Over time and with usage, lithium-ion cells experience a decline in energy storage capacity, leading to reduced performance. This aging phenomenon is observable in devices like mobile phones and laptops, where battery deterioration becomes noticeable. While this degradation is inconvenient for portable devices, it poses a more critical concern for electric vehicles. The aging of battery cells directly impacts the available driving range of electric vehicles, limiting their overall efficiency and usability.
The aging of lithium-ion cells is an inherent characteristic resulting from chemical reactions between the negative electrode and electrolyte. This aging process is influenced by various factors, including cell usage and design. Certain conditions and practices can accelerate the rate of aging, such as prolonged storage at full charge, high charge currents, charging at low temperatures, using cells at high charge currents, and subjecting cells to extreme voltage ranges during cycling. Currently, there is no universal solution to ensure optimal battery life under all conditions. Addressing this challenge requires ongoing advancements in cell design, battery pack construction, and optimization of usage patterns. Additionally, gaining a deeper understanding of the fundamental aging mechanisms associated with emerging cell chemistries is crucial.
The goal is to continue improving battery technology to extend battery life and performance across a range of operating conditions. This necessitates a multidimensional approach involving advancements in cell design, construction techniques for battery packs, and optimizing the usage patterns to maximize the lifespan of lithium-ion cells.
By technology, the lithium-ion segment is expected to grow at the fastest rate during the forecast period.
From 2023 to 2028, the lithium-ion technology is projected to exhibit the highest growth rate compared to other battery technologies. This growth can be attributed to the superior energy density offered by lithium-ion batteries, surpassing that of lead-acid batteries. As a result, the lithium-ion segment is poised for significant expansion during the forecasted period, driving overall market growth.
By power rating, the 6 to <10 kW segment is expected to hold the largest share during the forecast period.
Throughout the forecast period, the 6 to <10 kW segment is anticipated to maintain its leading position in terms of market share. This segment's growth is primarily fueled by the prevailing challenges of unreliable grids and prolonged power outages in developing countries across Asia Pacific and Africa. It is driven by the need for reliable power solutions in these regions to mitigate the impact of unstable electrical grids and ensure uninterrupted access to electricity.
By ownership type, customer-owned segment is expected to grow the fastest, during the forecast period.
The residential energy storage market is segmented based on ownership type, which includes customer-owned, utility-owned, and third-party-owned systems. Among these segments, the customer-owned segment is experiencing significant growth. This growth can be attributed to its ability to address challenges related to overvoltage and imbalances in energy supply and demand. Customer-owned energy storage systems empower residential consumers to manage their energy usage effectively, ensuring a more stable and efficient energy distribution within their premises.
Europe is expected to be the largest market during the forecast period.
During the forecast time frame, Europe is anticipated to be the largest and fastest-growing regional market for residential energy storage. The development of the domestic energy storage market in Europe is characterised by strategies for reducing dependency on variable electricity prices and improving the usage of self-produced green energy.
Key Market Players
The major players in the global residential energy storage market are Tesla (US), Panasonic Holdings Corporation (Japan), Sonnen GmbH (Germany), VARTA AG (Germany) and Enphase Energy (US).
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Report Metric |
Details |
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Market Size Available for Years |
2020–2028 |
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Base Year |
2022 |
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Forecast Period |
2023–2028 |
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Value (USD Million) |
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Segments Covered |
Technology, power rating, connectivity type, ownership type, operation type and region |
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Geographic Regions Covered |
North America, Europe, Asia Pacific, South America and Middle East & Africa. |
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Companies Covered |
Major Players: Tesla (US), Panasonic Holdings Corporation (Japan), BYD Company Ltd (China), Enphase Energy (US), Sonnen GmbH (Germany), VARTA AG (Germany), Delta Electronics, Inc. (Taiwan), Huawei Technologies Co., Ltd. (China), Eaton (Ireland), SMA Solar Technology AG (Germany), LG Energy Solution (South Korea), GoodWe (China), E3/DC (Germany), Alpha ESS Co., Ltd (China), RCT–Power (Germany), SOLARWATT (Germany), SENEC (Germany), Shanghai PYTES Energy Co., Ltd (China), Pylon Technologies, Co. Ltd (China), Victron Energy (Netherlands), Dyness (China), TESVOLT AG (Germany), Turbo Energy – Solar Innovation (Spain), BST POWER (SHENZHEN) LIMITED (China), WeCo srl (Italy), Powervault (UK), |
Residential Energy Storage Market Highlights
This research report categorizes the residential energy storage market by technology, power rating, connectivity type, ownership type, operation type and region.
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Recent Developments
- In September 2022, BYD Company partnered with Victron Energy to find out compatibility BYD Premium LVL / LVS and Victron inverters/chargers which was successfully completed.
- In August 2022, Tesla partnered with Green Mountain Power (GMP) for the deployment of Powerwalls, Tesla’s home battery pack, in a decentralized way with electric utilities. The relatively small electric utility operating in Vermont was one of the earliest adopters of Tesla Powerwall.
- In August 2022, Huawei Digital Power and Pinggao Group Co., Ltd have signed a Memorandum of Understanding (MoU) to strengthen their cooperation in the supply of innovative and reliable Huawei string inverters for PV plants in Balkan countries such as Greece, Bulgaria, and North Macedonia.
- In February 2022, Enphase Energy announced a partnership with Swell Energy that, Enphase Energy Systems powered by IQTM Microinverters and IQTM Batteries will be able to participate in Swell's distributed, virtual power plant (VPP) programs in California, New York, and Hawaii as a result of the collaboration.
Frequently Asked Questions (FAQ):
What is the current size of the residential energy storage market?
The current market size of the global residential energy storage market is estimated at USD 898 million in 2023.
What are the major drivers for residential energy storage market?
Significant demand for electric vehicles.
Which is the fastest-growing region during the forecasted period in the residential energy storage market?
The Europe residential energy storage market is estimated to be the largest and the fastest growing region, during the forecast period.
Which is the fastest-growing segment by technology during the forecasted period in the residential energy storage market?
The lithium-ion segment is estimated to be the largest and the fastest growing segment by location.
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This study encompassed four primary activities to determine the current size of the residential energy storage market. Thorough secondary research was conducted to gather information on the market, peer market, and parent market. These findings, assumptions, and market sizing were then validated through extensive primary research involving industry experts across the value chain. The total market size was estimated using both top-down and bottom-up approaches. Market breakdown and data triangulation techniques were applied to determine the sizes of market segments and corresponding subsegments.
Secondary Research
This research study extensively relied on a wide range of secondary sources, including industry publications, newspaper articles, the Statista Industry Journal, and the UNESCO Institute of Statistics. These sources were used to gather relevant information for conducting a technical, market-oriented, and commercial analysis of the utility communication market. Additional secondary sources utilized in the study included annual reports, press releases, investor presentations of companies, white papers, certified publications, articles by reputable authors, manufacturer associations, trade directories, and databases.
Primary Research
Primary sources included a number of industry professionals from core and adjacent industries, manufacturers, preferred suppliers, service providers, technology developers, and organisations connected to all nuclear sector segments. To gather and verify qualitative and quantitative data, as well as to evaluate the market's prospects, in-depth interviews were conducted with a variety of primary respondents, including key industry participants, subject matter experts (SME), C-level executives of the key market players, and industry consultants, among other experts. Below is a breakdown of the key responders:
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Market Size Estimation
The size of the worldwide Residential energy storage market and its related submarkets has been estimated and validated using both top-down and bottom-up methods. The market's numerous subsegments were all estimated in great detail using these techniques. The following are some of the research techniques used to calculate the market size:
- Several secondary sources were used to identify the major players in the market and industry, and primary and secondary sources were used to calculate the market shares of each company in each region.
- By primary and secondary research methods, the industry's supply chain and market size, in terms of value, have been determined.
- The percentage split, breakdown, and calculation has been made using secondary sources and confirmed with the primary sources.
Global Residential Energy Storage Market Size: Bottom-Up Approach
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Data Triangulation
The market was divided into a number of segments and subsegments after the overall market size had been determined utilising the above-discussed market size estimation methodologies. The data triangulation and market breakdown techniques were used, when needed, to complete the market engineering process and determine the precise statistics of each market segment and subsegment. By examining multiple patterns and aspects from the supply and demand sides of the home energy storage sector, the data was triangulated.
Market Definition
The residential energy storage market focuses on providing energy storage solutions specifically designed for residential properties. It encompasses the development, manufacturing, and deployment of rechargeable energy storage systems that can store electricity from various sources like solar panels, the grid, or other renewable sources. These systems offer several advantages, including increased utilization of renewable energy, backup power during outages, load shifting to manage peak demand, and potential cost savings through optimized energy usage.
The market also includes related products and services such as energy management systems, monitoring software, installation, and ongoing maintenance. Key players in the market include manufacturers, integrators, service providers, and installers who offer a diverse range of tailored energy storage solutions for residential customers.
The growth of the residential energy storage market is driven by factors such as the rising adoption of residential solar power, supportive government policies, the desire for energy resilience and grid independence, and increasing environmental awareness. As the demand for clean and reliable energy solutions increases, residential energy storage enables homeowners to manage energy consumption, reduce grid dependence, and contribute to a sustainable energy transition.
Key Stakeholders
- Residental energy storage Manufacturers
- Suppliers and Distributors
- Installers and Service Providers
- Homeowners
- Utilities and Grid Operators
- Regulatory Bodies and Government Agencies
- Research Institutions and Industry Associations
- Energy Management System Providers
- Environmental and Renewable Energy Advocacy Groups
Objectives of the Study
- To estimate and describe in terms of value the size of the home energy storage market, by technology, power rating, connectivity type, ownership type, operation type, and region.
- To give comprehensive details on the key factors impacting the market's growth, including opportunities, challenges, and restraints.
- To calculate the market's size in terms of value
- To strategically analyse micromarkets in terms of their unique growth trends, prospects, future expansions, and market contributions.
- To offer post-pandemic estimates for the domestic energy storage market and assess how the pandemic has affected the industry as a whole and the value chain.
- To project the residential energy storage market's growth in each of the five major world regions—North America, Europe, Asia Pacific, South America, and Middle East & Africa—with respect to each of these regions.
- To assess market potential for participants and the market leaders' competitive environment
- Identifying important players' strategic profiles and thoroughly examining each one's market shares and fundamental skills
- To examine competitive trends in the home energy storage industry, such as investments and expansions, mergers and acquisitions, product launches, contracts and agreements, and joint ventures and collaborations.
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to your specific needs. The following customization options are available for the report:
Company Information
- Product Matrix, which provides a detailed comparison of the product portfolio of each company
Company Information
- Detailed analysis and profiling of additional market players
Generating Response ...
Growth opportunities and latent adjacency in Residential Energy Storage Market