The residential battery market is expected to grow at a CAGR of 6.5% during the forecast period 2020 - 2025. The residential battery market is likely to grow in the coming years, owing to increasing deployment of solar power generation and rising need for energy storage solutions in residential sector across the world. The steady improvement of battery performance achieved through sustained R&D, aimed at improving battery materials, reducing the amount of non-active materials and the cost of materials, improving cell design and production yield, and increasing production speed. Therefore, decline in lithium-ion battery prices are expected to drive the market over the forecast period. On the other hand, factors such as complexity, short life span, and failure due to deep and continuous cycling etc. are hindering the growth of the market.
- Lithium-ion batteries is expected to dominate the market majorly due to its favourable capacity-to-weight ratio and other factors like better performance etc.
- The rising use of energy storage systems is expected to create immense opportunities for residential battery market.
- Asia-Pacific is expected to dominate the market with majority of the demand coming from the countries such as the China and India.
Key Market Trends
Lithium-ion Battery to Witness the Market Demand
- Among different types of battery technology, lithium-ion battery (LIB) is expected to dominate the residential battery market majorly due to its capacity-to-weight ratio and other factors like better performance, high energy density, and decreasing price.
- In 2019, lithium-ion battery price was around USD 161/kWh, 81.7% lower than the price in 2010. Lithium-ion battery prices are falling continuously and are down by 6.2% in 2019 from 2018 levels; it has witnessed 80% drop since 2010. The average lithium-ion battery pack price is down to USD 209/kWh, and the prices are expected to fall below USD 100/kWh by 2025.
- The price of LIB is usually high, as compared to other batteries. Also, leading players in the market have been investing, in order to gain economies of scale and in R&D activities, to improve LIB's performance and price.
- Lithium-ion batteries find application in a wide range of consumer goods, like smartphones, wearables, laptops, digital cameras, remote controls and gaming devices. Lithium-ion batteries are safer and have higher capacity power packs and are more economical than other alternatives for long-term use.
- Therefore, the emergence of new and exciting markets such as electric vehicle and energy storage systems (ESS), for both commercial and residential applications, is expected to boost the demand for lithium-ion battery during the forecast period.
Asia-Pacific to dominate the Residential Battery Market Growth
- Asia-Pacific has multiple growing economies with substantial natural as well as human resources. The region holds the majority share in terms of revenue, with China and India being the major contributors. These countries are likely to exhibit immense growth potential during the forecast period.
- The Chinese residential battery market is expected to grow during the forecast period, led by the government's policy and regulatory support. The Chinese government has already shown its ability to stimulate high growth in domestic demand for solar-related equipment, through subsidies and installation targets.
- With increasing disposable income in emerging economies of Asia-Pacific, such as China and India, when coupled with the rising need for reliable energy supply is expected to result in a growing demand for residential batteries. Furthermore, Asia-Pacific is home to the fastest urbanizing countries and the expected increase in energy demand is likely not to be met by the increasing energy production.
- China is one of the largest markets for the electric vehicle and has registered ~30 times faster growth than the electric vehicle market in 2018 when compared to 2017.
- Asia-Pacific is home to the fastest urbanising countries and this, in turn, is likely to create an significant demand for residential battery for a wide range of applications including consumer electronics, back-up power supply systems, and electric vehicles.
The residential battery market is fragmented. Some of the major companies in the market include ABB Ltd, Amara Raja Batteries Ltd, Samsung SDI, Luminous Power Technologies, and LG Chem Ltd.
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