Residential Energy Storage Market Report: Size and Share Analysis, Trends, Forecasts (2024-2030)

Residential Energy Storage Market Size & Share

The global residential energy storage market size was USD 801.3 million in 2023, and it is expected to reach USD 4,240.3 million by 2030, advancing at a CAGR of 27.9% during 2024–2030.

• This can be ascribed to the rampant infrastructure development, rising consumer spending on energy storage, mounting government and private investments in the production of renewable energy, increasing concern of individuals regarding environmental degradation, growing interest in attaining self-sufficiency, high R&D expenditure, and booming energy consumption in developing regions.
• Furthermore, the market is expected to grow as a result of the increasing government and private spending for uninterrupted power supply, bolstered by residential owners’ initiatives to adopt solar energy, and government initiatives that are boosting the adoption of the adoption of energy storage systems in homes. Additionally, financial as well as self-credit programs for integrating renewable energy sources into the residential power supply are available in many countries.

Residential Energy Storage Market Trends & Drivers

Community Energy Storage Systems Are Trending

Community energy storage (CES) is a cutting-edge smart grid technology that provides various benefits of distribution grids, in terms of reliability, quality, and control stability. This technique has become a vital part of contemporary microgrids as it offers benefits to both utilities and consumers. It eases the effects of the sporadic output of DERs, including PVs; and other smart grid components, including EVs, and integrates them into the smart grid. CES is mostly placed at the grid periphery, which is close to customers and DERs.

The core concept of CES, which was first applied in HV/MV substations equipped with CES batteries, can provide benefits that are far greater than those of traditional substation batteries. This kind of CES might be advantageous for regional control at the feeder/transformer level. Without the requirement for an OLTC at the substation, new types of substation CES units may provide voltage regulation through their four-quadrant inverters.

In recent years, this concept has expanded with the inclusion of DERs and the client side. The main motives fora having CES in distribution networks include smoothening of DERs’ intermittencies, such as output shifting/leveling, peak-shaving, and power quality enhancements, including voltage and reactive power support, frequency control, and islanding during outages. A CES contains a battery, typically a lithium-ion battery box; and a measurement/control system, which comprises a battery management system (BMS) and inverter monitoring/control. CES also features a fully dispatchable four-quadrant inverter, allowing for the swapping of active and reactive powers in both the directions, which is the key difference between CES and DGs.

In other words, CES has the ability to control frequency and voltage and add and subtract reactive power from the grid. The CES is quite easy to use. Due to system-active/reactive needs, such systems supply either active or reactive power from their batteries. As it can offer power for a short time while discharging, CES can be viewed as a backup power source for a particular set of houses.

Increasing Focus on Utilizing Renewable Energy Sources Is Driving The Market

• The use of renewable energy sources for enabling a more-reliable and efficient energy supply is increasing.
• Numerous nations have openly declared their commitment to achieving carbon neutrality in response to the mounting concerns about the repercussions of the increasing atmospheric concentrations of carbon dioxide and other greenhouse gases (GHGs) on the global climate.
• By transitioning to renewable energy sources, societies can significantly reduce their carbon footprint, thus contributing to the overarching goal of carbon neutrality.
• According to the International Energy Agency (IEA), global renewable capacity additions are estimated to soar by 107 Gigawatts (GW), to more than 440 GW in 2023.
• Additionally, in 2022, China represented nearly half the global increase in renewable power capacity, and by 2024, it is projected that China's share will reach approximately 55% of the global annual renewable capacity deployment.
• Similarly, India is expected to experience a surge in renewable capacity additions in 2024, driven by the accelerated deployment of onshore wind, hydropower, and distributed solar photovoltaic (PV) plants.
• In this regard, in 2023, India announced an investment worth $4.3 billion in technology, to clean up the country’s economy and create jobs.
• Additionally, according to the European Environment Agency, renewable energy production and consumption have increased rapidly across the European Union (EU), which achieved its 20% renewable energy target in 2020. In 2022, 22.5% of the energy consumed in the EU was generated from renewable sources.
• The increasing adoption of renewable energy sources at both the individual and industrial scales fuel the need for energy storage to not only bridge the gaps in intermittent generation but also maximize the efficiency of renewable installations. Energy storage systems enhance grid stability, enable better integration of renewable resources into the existing power infrastructure, and provide backup during periods of low generation.
• Hence, as the world shifts toward cleaner energy alternatives to combat climate change, the demand for energy storage technologies is likely to rise. This is because storage solutions, particularly advanced Li-ion batteries, play a pivotal role in ensuring a reliable and consistent power supply from renewable sources.

High Installation and Replacement Costs

• While the demand for energy storage solutions is on the rise, the initial investment required for installing these systems can be high for many consumers and businesses.
• The cost for setting up energy storage facilities depends on the size of the entire energy storage system, type of battery used, such as Li-ion or SLA; and the location of the project. For instance, projects in remote or off-grid locations may require an additional investment due to the high transportation and installation expenses.
•  Similarly, projects aimed at meeting high energy requirement may necessitate the setup of large and complex systems, thereby leading to high overall investments.
• Further, as the lifespan of batteries and other critical components, such as battery management systems, is finite, periodic replacement becomes necessary.
• The expense incurred in upgrading or replacing outdated equipment can be substantial, thus lowering the overall cost-effectiveness and feasibility of energy storage solutions. Addressing these high installation and replacement costs is crucial for fostering a broader acceptance of energy storage systems and making them more accessible for a diverse range of consumers and industries.

In-Depth Segmentation Analysis

Ownership Type Overview

The customer-owned category held the largest revenue share in 2023, and it is further expected to maintain its position during the prediction period.

• This will be because of the several advantages of customer-owned ESSs, such as reduced electricity cost per kilowatt-hour; burgeoning demand for rooftop PV solutions, and the rising focus on attaining self-sufficiency.
• Furthermore, the utility-owned category held a significant revenue share. This can be ascribed to the rising need for grid-scale electrical energy storage technologies and government support for utility providers.

Ownership type covered in the report include:

• Customer-Owned (Largest Category)
• Utility-Owned (Fastest-Growing Category)
• Third-Party-Owned

Connectivity Type Insights

The on-grid category accounted for the larger revenue share in 2023, and it is further expected to maintain its dominance during the forecast period.

• With on-grid systems, the additional energy generated can be transferred to the utility that owns the grid, allowing the individual to gather credit, which can be withdrawn at the end of the year.
• On-grid residential ESS has also become more popular as a result of a number of benefits, including energy arbitrage; residential customers can integrate energy storage into their current solar PV system and utilize time-of-use on-peak and off-peak electricity prices to maximize the value of their solar energy storage system.
• Furthermore, the off-grid category will witness significant growth. This can be attributed to the fact that such systems are considered optimal for homeowners who want to switch to 100% green energy and who reside in rural areas, where the current power supply may not be adequate or dependable.
• Additionally, residential power storage allows for grid flexibility, so that users always have access to power whenever and wherever they need it. Both reliability and resilience depend on this flexibility.
• The benefit of improved dependability and resilience, likewise, rises as the price of outages continues to climb.

The following connectivity type are included in the report:

• On-Grid (Larger and Faster-Growing Category)
• Off-Grid

Utility Insight

The 6 to 10 kW category held more than 55% revenue share in 2023. It is expected to maintain its position during the prediction period. This is due to the rising energy consumption, increasing frequency of long power outages, faults in grid systems, and mounting demand for a greater amount of stable power.
Below kW ranges are covered in the report:

• 3 to 6 kW
• 6 to 10 kW (Largest and Fastest-Growing Category)
• Above 10 kW

Technology Analysis

The lithium-ion category holds the larger revenue share, over 75%, and it is further expected to maintain its dominance in the future. This is due to the fact that such batteries are more reliable and stable and can be recharged numerous times. Additionally, compared to conventional rechargeable batteries, Li-ion variants have better energy densities, higher voltage capacities, and lower self-discharge rates, which enhance power efficiency by allowing a single cell to hold charge for longer periods.

Below technology-based systems are covered in the report:

• Lead–Acid
• Lithium-Ion (Larger and Faster-Growing Category)

Europe Is Prime Revenue Contributor

Europe accounted for the largest revenue share, more than 45%, in 2023, and it is further expected to maintain its dominance during the coming years. This is due to the rapid adoption of rooftop solar power, a 30% government subsidy for the battery system, rise in the urbanization rate, and presence of a huge number of industry players.

Additionally, the increasing demand for EVs and rising implementation of virtual power plants raise the installation rate of such systems. The increasing usage of EVs creates a significant load on the current grid infrastructure, and to lessen the load, governments across the EU encourage EV owners to install energy storage solutions at home, which can be used to charge the vehicles.

In addition,

• Germany contributes the majority of the revenue to the region, owing to the high need for a stable power supply, growing number of residential buildings, government support, and high demand for cost-efficient solutions.
• The Renewable Energy Law, or EEG 2021, was amended in Germany in 2021. As part of this change, owners of PV systems for self-consumption up to 30 kW in capacity are free from the EEG fee. Given that the majority of the residential systems fall within the aforementioned range, this amendment is expected to enhance the residential battery market growth prospects.

Moreover, APAC is a significant user of such systems due to the increasing population, surging demand for renewable energy, rising consumer spending, vast consumer base and its surging disposable income, and booming adoption of advanced technologies.

Moreover,

• The regional industry advance is influenced by the government measures to encourage the residential sector to embrace renewable energy sources, escalating public investments in the electrification of rural areas, and growing production of sustainable electricity.
• The rapid shift of American and European ESS giants’ production facilities to emerging economies, such as China and India, will further augment the market growth.
• China generates a remarkable chunk of the revenue owing to the growing economic activities, low cost of solar panels due to a huge manufacturing base, expanding semiconductor industry, and rising consumer spending.

North America also held a significant revenue share in 2023, attributed to the increase in the pace of technological advancements in the energy sector, the growth in EV sales, and the rise in the need to equip the existing solar PV systems with storage systems.

• The U.S. is the prime revenue contributor to the regional market, owing to the presence of international players, rapid adoption of advanced technologies, and favorable government policies.

Further, regions and countries analyzed for this report include:

• North America
  • U.S. (Larger and Faster-Growing Country Market)
  • Canada
• Europe (Largest Regional Market)
  • Germany (Largest Country Market)
  • U.K. (Fastest-Growing Country Market)
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia-Pacific (APAC) (Fastest-Growing Regional Market)
  • China (Largest Country Market)
  • Japan
  • India (Fastest-Growing Country Market)
  • South Korea
  • Australia
  • Rest of APAC
• Latin America (LATAM)
  • Brazil (Largest and Fastest-Growing Country Market)
  • Mexico
  • Rest of LATAM
• Middle East and Africa (MEA)
  • Saudi Arabia (Largest and Fastest-Growing Country Market)
  • South Africa
  • U.A.E.
  • Rest of MEA

Competitive Landscape

A large number of large and mid-sized companies are active in the market. To further their growth and offer a sustainable solution to the electricity needs of residents, they are actively launching new products. The competition among the players is therefore intense, which is compelling them to create smart strategies to survive in the market and enhance their significance among customers.

Residential Energy Storage Companies News

• In July 2023, Panasonic Industry Co. Ltd. launched EverVolt home battery which supports both DC and AC coupling for new and existing solar arrays.
• In June 2023, VARTA AG invested $21.7 million on its gigafactory for energy storage systems in Germany.