The recent future of home energy storage industry

When electricity bills continue to rise and power outages occur frequently, how to make household electricity more autonomous and cost-effective? Home energy storage systems are becoming a new energy solution for modern households - it is like a miniature 'power bank' which in Tycorun's product is power storage brick. It can store electricity converted from sunlight and wind, providing emergency power supply during power outages, and intelligent scheduling during peak hours, allowing each household to take control of their own energy initiative.

This article will discuss the recent future of home energy storage industry and help you learn the latest news about the home energy storage industry.

What is household energy storage

Home energy storage is an energy storage system used in households or residential environments, typically a battery energy storage system. Their main purpose is to store electrical energy for daily use or when needed. Home energy storage systems can be combined with renewable energy systems such as solar photovoltaic panels or wind turbines. In this way, the system can convert electricity into direct current and store it in the battery, and then convert it into alternating current for household use when needed.

Features of household energy storage system

Safe and reliable

The home energy storage system adopts high-quality components such as lithium ion solar batteries, which have excellent safety and reliability. 

Strong scalability

Home energy storage systems can be expanded or upgraded according to the actual electricity needs of households, achieving flexible system adjustments. easy operation.

The home energy storage system has a friendly human-machine interface and intelligent control functions that can achieve remote monitoring and control, with simple and convenient operation.

Function of household energy storage system

Enhance self-sufficiency capability

Home energy storage systems can improve the self-sufficiency of households and reduce dependence on traditional energy sources by effectively storing renewable energy such as solar and wind energy.

Reduce energy costs

Home energy storage systems can store solar energy generated during the day and use it at night or in the dark, reducing dependence on the power grid and lowering energy storage costs for households.

Improving environmental quality

Home energy storage systems can promote the utilization of renewable energy, reduce the consumption of fossil fuels, and thus improve environmental quality.

The current market situation of household energy storage

Home energy storage systems have outstanding advantages and have become one of the most promising incremental markets. home energy storage systems have the characteristics of safety, reliability, strong scalability, and easy operation. They can provide backup power to cope with power outages, balance energy supply and demand, improve self-sufficiency, and reduce electricity bills. With the development of technology and the reduction of costs, home energy storage systems are becoming increasingly popular in the market.

Home energy storage systems have outstanding advantages and have become one of the most promising incremental markets. The global installed capacity of home energy storage will increase from 0.5GWh to 12GWh from 2018 to 2023, and it is expected that the global installed capacity of home energy storage will reach 247.6GWh by 2026.

Global market situation

The high per capita electricity consumption combined with the continuous rise in electricity costs has led to rapid development of household storage in Europe and the United States. From the perspective of regional development, the development of household storage in Europe and the United States is relatively leading, accounting for about 70% of the total.

The main reasons for this situation are:

• On the one hand, the per capita electricity consumption in European and American countries is relatively high. According to the data, the annual per capita power consumption of Germany, the United States and Australia in 2020 will be 9857kWh, 12235kWh and 6771kWh respectively, far exceeding the 5297kWh per capita consumption of China. On the other hand, the cost of electricity in Europe continues to rise. In recent years, with the emergence of energy supply shortages, electricity prices in major European countries have rapidly increased and maintained a high level.
• At the same time, European countries are heavily dependent on energy imports, and energy prices fluctuate greatly, increasing residents' concerns about electricity supply. Taking Germany as an example, from December 2021 to December 2022, the residential electricity price in Germany has increased from 0.323 euros/kWh to 0.336 euros/kWh. Since 2023, electricity prices in major European countries have decreased but remain at relatively high levels, and users' demand for electricity economy is evident.

Driving factors for the household energy storage industry development

The future development of household savings will be driven by three factors: essential needs, policies, and economics.

Taking the European market as an example - rigid demand is a long-term driver, subsidies are the bottom line of demand.

In 2022, the Russia-Ukraine conflict will further expand. The geopolitical crisis will lead to the imbalance of the energy supply side in Europe. The energy crisis will be completely ignited, and the cost of residential electricity will soar to 65 euro cents/kWh at the highest. Solving the security, stability and independence of energy consumption will become a rigid demand driver.

At the same time, in order to solve the problem of high energy prices, more than 19 countries, mainly Germany, Italy, Austria, Spain, and the United Kingdom, have introduced short-term subsidy policies for household photovoltaic/energy storage. Taking Germany as an example, the investment return cycle for home energy storage installation is as low as 3-4 years.

The triple factors of "essential needs (energy safety, stability, and independence)", "economic efficiency (improving photovoltaic utilization and saving electricity costs)", and "policies (short-term installation subsidies, long-term carbon neutrality policies)" have jointly driven the explosive demand for home energy storage in the European market in 2022.

In 2023, with a series of efforts in Europe, including limiting maximum electricity prices, restarting thermal and nuclear power plants, and reserving natural gas in advance to ensure supply, the cost of electricity in Europe has been brought back to the level at the end of 2021 (30 cents/kWh), and subsidy policies in many countries, mainly Italy, have begun to slow down.

Therefore, in the absence of high electricity prices and the slowdown or cessation of subsidies, the overall high growth rate of the European home energy storage market is destined to be unsustainable. At present, home energy storage has not become a necessity for households, and subsidies have become the bottom line of demand in the European home energy storage market.

However, the short-term drop in electricity prices has not helped Europe completely solve the "essential" problem of energy security, stability, and independence. Although the short-term explosive growth may to some extent overdraw the growth rate of the European home energy storage market in the past two years, in the long run, the development of the European home energy storage market will be driven by basic needs and long-term carbon neutrality policies, supplemented by short-term subsidies and household photovoltaic construction, transitioning from the initial stage of non basic needs of the middle class to the essential stage of new household energy systems (white electricity).

From 2021 to 2030, home energy storage in Europe will continue to maintain an average growth rate of around 27%, while electrification and the penetration of AI applications will accelerate the arrival of this stage.

Looking ahead to the world, over 90% of home energy storage demand in the future will still come from rigid demand driven (stable and safe energy consumption) and economic driven (electricity cost savings), but the product forms vary in different markets, with emerging markets such as Pakistan, South Africa, and the Middle East being the main examples.

Although subsidies can accelerate the development and popularization of the household savings market to a certain extent, they can also lead to overdrawn market growth potential in the short term.

Based on current macro factors such as policies, economy, population, and electricity supply, Europe will remain the world's largest home energy storage market until 2030. However, the overall market share of new additions will decrease from a peak of 69% to 36% by 2030, and the proportion of emerging markets will increase from 9% in 2021 to 20% in 2023.

Future rivalry in household storage market

At present, home energy storage is developing towards intelligence and high integration that better meets the needs of end users, gradually becoming a white goods that adapts to future home intelligent energy systems.

At the product design level, companies with a background in power electronics need to consider more from a C-end perspective. For example, there is no significant difference in the experience of end customers between 99% inverter conversion efficiency and 80% inverter conversion efficiency. How to transform technological advantages into product advantages that can be perceived by end users and marketed will be a necessary test for companies with a focus on power electronics.

In contrast to power electronics companies, consumer electronics companies are more familiar with how to conduct user experience design and can provide product interfaces and operating methods that better meet consumers' psychological expectations. These designs can be seen from portable energy storage products and power bank products.

White goods companies entered the market relatively late, but in terms of the long-term development of household energy storage, their ability to grasp retail channels, manage supply chains, and integrate home energy storage products with other household appliances such as heat pumps, refrigerators, washing machines, air conditioners, high-efficiency water heaters, etc., providing overall smart home solutions may be favorable conditions for doing a good job in household energy storage.

In the industry, there have been smart home solutions for different overseas markets and segmented applications, such as photovoltaic+heat pump+energy storage, photovoltaic+air conditioning, photovoltaic+energy storage+charging, etc. With the continuous penetration of electrification and AI, home energy storage may become the main control platform in future smart home systems, gradually evolving into an inseparable part of future home energy systems.

Conclusion

Therefore, as the growth rate of the global home energy storage market, mainly in the European market, returns to rationality, home energy storage enterprises will also enter the stage of ecological integration, gradually establishing moats in segmented application scenarios, which may become a key point in the next three years. At the same time, with the gradual electrification of home energy storage products, more and more smart home ecological enterprises will officially enter the market, developing more application scenarios and forms combined with energy storage products. In the future, home energy storage will also be more intelligent, enabling end consumers to truly enter the era of energy interconnection.

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