European Residential Battery Storage Outlook

• SPE's report on residential storage capacity of Europe sees the continent adding up to a total of 12.8 GWh in 2025 on cumulative basis
• Demand in 2020 was concentrated in the top 5 markets of Germany, Italy, UK, Austria and Switzerland with 93% market share
• Residential solar and storage protects users from volatile retail electricity prices while helping Europe to meet its climate targets, according to the report
• Authors of the report demand European policymakers to include distributed storage in their revised National Energy and Climate Plans

A new report by European solar PV lobby association SolarPower Europe (SPE) sees European residential storage capacity to grow from 3 GWh installed in 2020 by more than 400% to 12.8 GWh in 2025.

In the medium scenario offered in the report, cumulative residential storage capacity installed in Europe is expected to grow to 4.4 GWh in 2021, growing to 6.1 GWh in 2022, 8.0 GWh in 2023, 10.3 GWh in 2024 and 12.8 GWh by 2025. In the high scenario, authors of the report expect the numbers to grow to 14.6 GWh by the end of 2025, while in the low scenario it is guided at 10.2 GWh.

It makes these assertions in its report titled European Market Outlook for Residential Battery Storage 2021-2025. SPE counts cumulative installed residential solar and storage systems in Europe as 140,000 units in 2020, up 44% annually.

The year 2020 was the 1^st time when more than 100,000 storage systems were installed in the continent over a 12-month period. It was also the 1^st time that annual installed capacity grew to a GWh scale.

Yet the demand was concentrated in top 5 markets of Germany, Italy, UK, Austria and Switzerland, accounting for 93% of the total installed storage capacity with Germany alone claiming 70% of newly installed storage capacity in 2020.

"If we want to see the residential battery market develop beyond the first few key countries, and help protect citizens from rising energy prices, more European governments need to move faster to fully implement the Clean Energy Package," pointed out SPE's Head of Market Intelligence, Michael Schmela.

Under the report's 5-year outlook, the market share of above mentioned top 5 countries in this space will come down to 88% by 2025.

According to the SPE, residential solar and storage offers a lower levelized cost of electricity (LCOE) in times of high energy prices. In Germany alone, households with premium solar and storage systems installed in 2020 secured a LCOE of €0.122 per kWh, nearly a 3^rd of the typical electricity price.

In the near future, while retail electricity prices will continue to remain high, that of residential solar and storage will see their economics continuing to improve. It will even become more competitive once component price crisis is addressed. Smart meters will also drive the uptake of storage.

Calling upon policymakers in Europe to include distributed storage in their revised National Energy and Climate Plans, the association's CEO Walburga Hemetsberger said, "Combining solar & storage is key to achieving a climate-neutral EU by 2050. Not only will it enable the EU to increase the share of renewables, but importantly, solar & storage will supply reliable, clean, and cost-effective energy to homes and businesses during peak times."

To encourage further battery storage installation in Europe, the association expects governments to support it with initial support schemes, and not burden manufacturers and investors under the upcoming EU Battery Regulation.

Schmela added, "Participative and regular grid planning exercises must be conducted at transmission and distribution level, and system operators must provide transparency on current and future system needs."

The report is available on SPE's website for free download.