Five Countries Driving Growth in the European Storage System Market

Market Trends – December 2021

You do not need to be able to see into the future to predict that electricity prices for private households will continue to be on the rise in the next few years – and that throughout Europe. At the same time, production costs for solar power have been falling, both for power directly from roof-mounted systems and from residential storage systems. According to a recent study by the industry association SolarPower Europe, the best solar and storage installations in Germany reach electricity generation costs of as little as 12.2 eurocents per kilowatt hour today. Electricity from the grid costs private households in Germany around three times as much.

Given these framework conditions, it comes as no surprise that the number and storage capacity of newly installed systems has risen sharply in the last five years – as figures from EuPD Research and the German Solar Association demonstrate. According to them, even under difficult circumstances due to the COVID-19 pandemic, around 73,000 residential battery systems were installed in Germany in the first half of 2021. That’s 59% more than in the same period of the previous year. The growing installed capacity of photovoltaic installations is considered one important driving factor behind this trend. Systems ranging from 10 to 15 kW as well as from 15 to 20 kW in particular have seen a steep increase since the EEG amendment in early 2021, with the number of installed storage systems growing in parallel.

In Germany, four manufacturers have been dominating the storage market: The brands sonnen, BYD, E3/DC and senec together have a three quarter market share. All other manufacturers of storage systems only reach market shares of less than 10%.

The European residential storage market

But how does Germany’s market growth compare to the European average? SolarPower Europe’s European Market Outlook for Residential Battery Storage 2021–2025 provides answers to this question. According to the study, newly installed capacity from storage systems in private households rose by 44% in 2020 compared to the previous year. Despite difficult market conditions due to the COVID-19 crisis, approx. 140,000 systems installed saw the European storage market exceed 100,000 installed battery units for the first time. Simultaneously, 1,072 megawatt hours (MWh) of newly installed storage capacity within a single year meant that the market broke the important gigawatt hour threshold for the first time.

While these figures are evidence of a successful year for manufacturers of storage systems, the cumulative growth of installed storage capacity is even more striking. In 2019, storage capacity for private households grew from less than 2 gigawatt hours (GWh) to over 3 GWh by 2020, which equals an increase of 54% over the previous year. The total storage capacity has risen tenfold since 2015.

The top 5 in Europe

In a country-by-country comparison, Germany is still the European leader for both photovoltaics and residential storage systems. Installation figures for 2020 indicate that the German market accounts for around 70% of the total installed capacity in the European residential storage system market, making it a force that cannot be overlooked. According to these figures, newly installed storage capacity in Germany grew by 51% to 749 MWh in 2020 compared to the previous year. Lagging behind Germany by a considerable margin, the other four countries making up the top 5 of the European residential storage system market are Italy, Great Britain, Austria and Switzerland. Together, these five countries are home to 93% of all European residential storage systems.

According to SolarPower Europe, the introduction of the Superbonus 110% scheme in Italy (a tax credit covering 110% of the cost for the low energy renovation of residential buildings, including the installation of solar and storage systems) as well as already existing incentive programs led to a 44% market growth (94 MWh) in 2020.

In Great Britain, market growth for 2020 amounted to 25% compared with the previous year, i.e. around 11,000 newly installed storage systems (81 MWh). In this context, the sharp reduction and ultimately suspension of the feed-in tariff for solar power in the residential sector continues have an effect, with the United Kingdom recording comparatively few residential photovoltaic installations, and a more pronounced growth of the storage market being thwarted.

In Austria, market growth amounted to around 10% in 2020 compared to the previous year, with 6,000 storage systems (41 MWh) newly installed. Finally, Switzerland saw an increase in the storage market of 39% (18 MWh) in 2020. Both countries established governmental incentive programs and created favorable political framework conditions.

Further price reduction and more installations

For the next few years, analysts predict that prices are going to continue to fall. By 2030, the price for lithium-ion batteries is expected to reach half of what it is today. Conversely, currently rising prices for photovoltaic installations and residential battery storage systems are considered a temporary trend. With supply chains being adjusted, SolarPower Europe expects the situation to calm down again by the second half of 2022, with market growth picking up again.

Overall, 2022 promises to be an exciting year for suppliers and manufacturers of battery-based storage systems, as well as for installers and users of photovoltaic and energy storage systems. ees Europe, the continent’s largest and most international exhibition for batteries and energy storage systems, will provide an overview of trends and technology, markets and market participants from May 11–13, 2022, in Munich.

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