Residential Energy Storage Market - Forecasts from 2023 to 2028

The residential energy storage market was valued at US$16.257 billion in 2021 and is expected to grow at a CAGR of 19.82% over the forecast period to be worth US$57.645 billion by 2028.

The residential energy storage market refers to the sales of energy storage systems designed for use in homes and other residential buildings. Residential energy storage systems offer homeowners the ability to store energy from sources like solar panels and the grid during times when electricity is less expensive. This stored energy can then be used during peak usage or when there is a power outage. Such systems typically involve batteries, inverters, and monitoring mechanisms that enable homeowners to keep track of their energy consumption and production. Residential energy storage systems can be installed as independent systems or integrated into existing solar PV systems.

The residential energy storage market is driven by the increasing frequency of power outages.

The increasing frequency of power outages is a significant driver for the growth of the residential energy storage market. In addition, climate change is having a substantial impact on the frequency and severity of weather events such as hurricanes, tornadoes, snowstorms, and wildfires. These extreme weather conditions can cause damage to power lines and other infrastructure, leading to power outages. Furthermore, the electrical grid in many countries, particularly in developed countries, is aging and needs upgrades. As infrastructure ages, it becomes more susceptible to failures, which can result in power outages. Natural disasters and severe weather events can exacerbate this, which can damage electrical equipment and infrastructure.

Factors such as the annual duration of electric power interruptions also significantly affect the market. Longer power interruptions can lead to more significant disruptions to households, businesses, and critical infrastructure, highlighting the need for reliable backup power solutions. Therefore, the duration of power interruptions is an essential factor influencing the demand for residential energy storage systems. For example, the Australian Energy Market Commission (AEMC) reported over 200 power outages in Australia in 2019, affecting over 1 million customers. The AEMC noted that extreme weather conditions and aging infrastructure were the primary causes of these outages.

Market Developments:

• LG Energy Solution, an international energy technology company involved in lithium-ion manufacturing, announced its collaboration with dcbel, an energy company promoting smart home solutions, in October 2022 to innovate new residential and home energy storage solutions.
• Matter Energy and Luminous Power Technologies, two residential energy solution provision companies, announced their collaboration in January 2023 to create home investors and stationary energy storage solutions for smart homes based on lithium-ion battery technology.
• Cabot Corporation introduced a new product line of conductive carbon additives in November 2022 to be used in manufacturing lithium-ion batteries for energy storage solutions and electric vehicles.

The lithium-ion segment will witness robust growth over the forecast period.

The lithium-ion battery sector holds a significant portion of the residential energy storage market share based on the type of technology due to the rapid advancement in lithium-ion technology and the widespread growth in the installation of solar panels and energy systems in the residential sector. In addition, the increase in the manufacture of lithium-ion batteries fueled by new product launches and collaboration events initiated by leading companies providing energy and battery storage solutions is further stimulating the development of the lithium-ion technology segment.

The increasing preference for lithium-ion batteries in the residential sector can be attributed to the rise in installed solar capacity. Lithium-ion battery technology can meet the fluctuating energy demands of households by effectively and rapidly monitoring energy storage and release. In addition, these batteries can store the excess energy produced by renewable solar energy systems due to their higher depth of discharge and battery round-trip efficiency. Therefore, the rise in the installation of solar panel and photovoltaic systems across the world provide an opportunity for the expansion of the lithium-ion battery technology market over the forecast period.

North America accounted for a major share of the global residential energy storage market in 2021.

The residential energy storage market has been segmented by geography into North America, South America, Europe, the Middle East and Africa, and the Asia Pacific.

The domestic energy storage industry in the United States has experienced a remarkable expansion in recent years and is projected to continue growing quickly. As a result, manufacturers of residential energy storage systems now have several opportunities. The market is being driven by consumers' desire to become more resilient, modifications to net metering policies, and the financial incentives of installing a residential energy storage system. The domestic residential energy storage industry in the United States has shown rapid expansion in recent years, with installations rising from 29 MWh in 2017 to 540 MWh in 2020, measured by energy capacity. Installations rose in terms of electricity capacity from 13 MW in 2017 to 235 MW in 2020. Installations significantly increased to 90 MW in the fourth quarter of 2020 and rose to above 100 MW in the first quarter of 2021. California accounted for 57 percent of installations in 2020, while Hawaii was the second-largest market with 16 percent of the total installation. In addition, consumers in the United States are becoming more interested in combining energy storage with solar PV systems. According to USITC data, in terms of installations, energy storage in residential complexes made up 20 percent of solar PV installations in 2020 compared to 7 percent in 2017.

Market Segmentation:

BY POWER TYPE

• 3-6 kW
• 6-10 kW

BY TECHNOLOGY TYPE

• Lithium-Ion
• Lead Acid
• Flow
• Sodium Nickel Chloride

BY Connectivity Type

• On-Grid
• Off-Grid

BY GEOGRAPHY

• North America
• USA
• Canada
• Mexico
• South America
• Brazil
• Argentina
• Others
• Europe
• Germany
• France
• United Kingdom
• Spain
• Italy
• Others
• Middle East and Africa
• Saudi Arabia
• Israel
• UAE
• Others
• Asia Pacific
• China
• Japan
• South Korea
• India
• Indonesia
• Taiwan
• Thailand
• Others