Residential Energy Storage Market

Residential Energy Storage Market Outlook (2023 to 2033)

The global residential energy storage market is valued at US$ 12.2 billion in 2023 and is predicted to jump to US$ 90 billion by 2033-end, expanding at a high-value CAGR of 22% over the decade.

Batteries are used in residential energy storage systems to store excess electricity for future use. These batteries, when combined with solar energy generated by a photovoltaic system, allow for the storage of daylight energy for continuous consumption. Energy storage batteries improve the efficacy of household solar power systems by properly managing electricity usage.

Distributed energy storage devices play an important role in reducing power fluctuations and maintaining good power quality in grid-connected configurations. Their major duty is to precisely size and strategically position energy storage systems within the distribution grid.

They ensure continuation in situations of temporary power outages due to their extremely fast response times. Home energy storage improves energy use by allowing consumers to store extra energy generated by renewable sources during the day for later use. This reduces their reliance on the electricity grid. There is a growing trend of conserving energy from renewable sources and then employing it to offer heating for space, warm water, and electricity to each outlet and device in the home.

Growth of the residential energy storage market can be attributed to the increasing adoption of battery energy storage systems (BESSs) integrated with renewable energy sources and grid connectivity. This integration enables homeowners to store surplus clean energy for personal use or sell it back to the grid.

These systems automatically recharge from the grid during off-peak hours, benefiting from lower electricity rates. This enhanced flexibility makes the energy system more versatile, facilitating a higher share of renewable energy utilization and supporting the grid's decarbonization efforts.

Report Attributes	Details
Residential Energy Storage Market Size (2022)	US$ 10 Billion
Estimated Market Value (2023)	US$ 12.2 Billion
Forecasted Market Value (2033)	US$ 90 Billion
Global Market Growth Rate (2023 to 2033)	22% CAGR
United States Market Value (2023)	US$ 3.5 Billion
China Market Value (2033)	US$ 15.5 Billion
China Market Growth Rate (2023 to 2023)	26% CAGR
Japan Market Growth Rate (2023 to 2033)	17% CAGR
Germany Market Growth Rate (2023 to 2033)	20% CAGR
Key Companies Profiled	BYD Co. Ltd. Samsung SDI Co. Ltd. Eaton Corporation Siemens AG Schneider Electric LG Energy Solution Ltd. Saft Groupe SA Sonnen GmbH Panasonic Corporation

What are the Aspects Fueling Global Residential Energy Storage Market Growth?

“Rising Green Energy Adoption & Environmental Awareness and Need for Resilience against Natural Disasters”

Several variables are driving the growth of the domestic energy storage sector. Market expansion in the electricity sector is being driven by the increasing use of battery storage systems, primarily due to the lower cost of batteries. Because of the increasing discretionary incomes around the world, high-value consumers are more likely to have their green energy storage system.

The market share is being driven by its increased demand in industrialized countries with an elevated degree of environmental awareness.

As a result of a continuing investigation in this area, the cost per kilowatt is decreasing. The increasing frequency of storms and wildfires in areas with vulnerable electricity infrastructure is pushing the market to develop solutions for energy storage. Residents in these regions prioritize energy storage as a primary activity to mitigate power disruptions caused by these natural disasters.

"Cost-Effective Solutions and Environmental Benefits Paving the Way for Market Growth"

Growing adoption of renewable energy sources, particularly solar photovoltaic systems, is driving a surge in demand for domestic energy storage systems. Residential, commercial, and industrial consumers who integrate energy storage with renewables can significantly enhance power quality and reliability. This increased system flexibility leads to various advantages, such as improved power quality, reduced peak demand, enhanced transmission and distribution network capacity, avoidance of deviation fines, and more.

Integration of energy storage also enables a reduction in diesel usage for battery backup applications. Consumers are increasingly adopting residential energy storage devices as a cost-effective approach to cut electricity rates. Ability of residential energy storage systems to lessen environmental effects by conserving renewable energy sources, including solar output, is fueling market growth.

Residential energy storage minimizes the amount of electricity consumed by battery-equipped homes during peak costs, leading to a rise in usage in recent years. Usage of battery storage devices is one of the most effective strategies to successfully integrate considerable volumes of solar and wind renewable energy in power systems across the world.

• Toyota, for example, unveiled the O-Uchi Kyuden residential battery storage system on June 2, 2022, based on the company's electrified automobile battery technology. The O-Uchi Kyuden system uses EV battery technology to offer an 8.7 kWh rated capacity and 5.5 kWh rated output. Residents can be provided with power during outages and on a daily basis using technology.

What are the Main Challenges that Residential Energy Storage System Manufacturers Face?

“Logistical Challenges and Technological Limitations Impacting Residential Energy Storage Adoption”

In certain regions, the existing infrastructure may not be well-equipped to handle energy storage integration, posing logistical challenges for adoption. Although battery technology has improved, there are still limitations in terms of storage capacity, efficiency, and lifecycle.

Advancements are continuously being made, but these limitations are expected to impact the overall performance and cost-effectiveness of residential energy storage systems. Regulations and permitting processes can vary widely from one region to another, making it challenging for homeowners to navigate the legal complexities of installing energy storage systems.

“Intermittent Nature of Renewable Energy Sources and Preference for Conventional Utilities”

Renewable energy sources such as solar and wind are intermittent by nature, dependent on weather conditions and daylight availability. This intermittency can create challenges for energy storage systems in maintaining a stable power supply. Traditional utilities may not fully embrace residential energy storage as it could potentially disrupt their existing business models and revenue streams.

Many consumers may not be aware of the benefits of residential energy storage or how these systems work, leading to lower demand and adoption rates. As with any technology involving energy storage, safety is a significant concern. Homeowners may have reservations about having batteries in their homes due to potential safety risks.

Country-wise Insights

What Makes the United States a Highly Profitable Market for Residential Energy Storage Providers?

“Substantial Investments in Energy Storage Technologies by Established Manufacturers”

Major technological firms are investing in energy storage technologies, and there is growing government support for research efforts related to scaling up home energy storage systems. This trend is aimed at ensuring renewable electricity and reducing the environmental impact, which is significantly contributing to market growth in this region.

• On September 23, 2021, for example, the United States Department of Energy (DOE) announced US$ 17.9 million in funding for four R&D efforts focused on improving domestic manufacturing of flow batteries and long-duration storage systems. This funding is expected to help provide the resources needed to expand the system with new and renewable energy sources, provide low-cost electricity to underserved areas, and contribute to the Biden Administration's goal of net-zero carbon emissions by 2050.

How is Demand for Residential Energy Storage Progressing in India?

“Rising Energy Demand and Government Incentives Driving Need for Residential Energy Storage”

Energy demand in India is rising due to rapid urbanization, industrial growth, and an expanding population. Residential energy storage solutions can help manage peak demand and improve energy efficiency. The Indian government has been actively promoting renewable energy adoption and sustainable practices. Various policies, incentives, and subsidies were in place to encourage the use of residential solar panels and energy storage systems.

Increasing adoption of solar power in residential properties created a demand for energy storage solutions to store excess solar energy generated during sunny hours for later use. Some regions in India experience frequent power outages and grid instability. Residential energy storage systems provide backup power during these disruptions, increasing their attractiveness to homeowners.

• On May 25, 2022, Sungrow, a renowned provider of renewable inverters globally, joined forces with Tata Power Solar Systems Limited, India's largest specialized EPC company, to build the most extensive battery energy storage system (BESS) in the country, boasting a capacity of 60.56 MWh. This groundbreaking facility is located in Phyang, Leh, India.

By collaborating with leading companies such as Tata Power Solar Systems Limited, Sungrow aims to maintain its leadership position in the Indian renewable energy sector while advancing cutting-edge approaches to deliver clean electricity nationwide.

Category-wise Insights

Which Residential Energy Storage Technology is Most Popular?

“Growing Preference for Lithium-Ion Batteries in Residential Energy Storage Systems Due to Their Cost-efficiency”

Based on technology, the domestic energy storage business is separated into batteries with lithium-ion and lead-acid batteries. In terms of revenue, the lithium-ion battery sector is expected to grow significantly during the projection period. Sustainable laws and regulations encourage the use of lithium-ion batteries to decrease carbon emissions. Another key factor driving increasing demand for lithium-ion batteries is their technological and cost benefits over traditional batteries.

Increasing investments by battery manufacturers in the development of more affordable and advanced lithium-ion batteries are supporting the rising need for lithium-ion batteries. Lithium-ion home energy storage has advantages in terms of cost, size, and charging and discharging rates. These features are advantageous to users who connect their power storage to a solar photovoltaic system to charge during the day and utilize the battery pack to power their homes at night.

Why are Customer-owned Residential Energy Storage Systems Gaining Traction?

“Popularity of Solar Roof Charging Schemes Driving Adoption of Customer-Owned Residential Energy Storage Systems”

The customer-owned segment of the domestic energy storage market, which contributes to the majority of revenue, is predicted to expand significantly throughout the forecast period. The high value placed on owning batteries is expected to stimulate demand for customer-owned residential energy storage systems. Another element driving the customer-owned system market is the decreasing cost per kWh of a residential energy storage system. As evidence of the environmental impact in the residential sector emerges, solar roof charging schemes are becoming increasingly popular.

Another key factor driving the development of customer-owned energy systems is the growing desire to reduce electricity costs, as well as extreme weather occurrences that disrupt the power grid, such as gales or storms. Government incentives for developing home storage are another factor fueling the rise of the customer-owned residential segment.

Competitive Landscape

The residential energy storage market is highly fragmented, with several important competitors operating at both the global and regional levels. Key players are focusing on innovation and strategic alliances to expand their respective product portfolios and achieve a strong foothold in the global market.

• In August 2022, Tesla partnered with Green Mountain Power (GMP) to install Powerwalls, Tesla's household battery pack, with electricity providers in a decentralized manner. The relatively small electric utility in Vermont was one of the first to utilize the Tesla Powerwall.
• In January 2021, Siemens provided its Digital Enterprise Technology to the United Kingdom’s first lithium-ion battery gigafactory. Britishvolt is expected to have access to Siemens' electricity, robotics, and Digital Twin production management technology.

Key Segments of Residential Energy Storage Industry Research

• By Power Rating :

  • 3 to 6 KW
  • 7 to 10 KW

• By Technology :

  • Lead-acid
  • Lithium-ion

• By Ownership :

  • Customer-owned
  • Utility-owned
  • Third-party-owned

• By Connectivity Type :

  • On-grid
  • Off-grid

• By Region :

  • North America
  • Latin America
  • Europe
  • Asia Pacific
  • Middle East & Africa