High Energy Prices Driving Residential Battery Demand In Europe

• R-BESS capacity in Europe more than doubled to 2.31 GWh in 2021, led by Germany
• In 2022, it is likely to grow 71% annually to 3.9 GWh taking cumulative to 9.3 GWh across the continent
• Lack of installers and acute shortage of batteries if dealt with, along with supportive policy environment at EU and national level, R-BESS growth can be more

Sky rocketing energy prices in Europe is not only leading to a distributed rooftop solar boom, but also driving a massive growth in residential battery energy storage systems (R-BESS), according to SolarPower Europe (SPE) that expects 71% annual growth for the latter with 3.9 GWh in 2022.

In its latest report European Market Outlook For Residential Battery Storage 2022-2026, SPE says in 2021 the R-BESS market more than doubled to 2.3 GWh, led by Germany that accounted for 59% market share thanks also to the presence of several storage system assembles here. Germany installed 1.3 GWh of home batteries with 81% annual growth, Italy added 321 MWh in 2021 with a 240% annual improvement.

Executive Advisor to SPE and Project Lead of the report Michael Schmela attributes this to 'well-thought incentive schemes' as being helpful to kick-start a battery storage market until it can stand on its own. "In order to accelerate solar & storage deployment, we call on EU policymakers to use existing funds to support the battery component in emerging residential solar markets," he added.

Going forward, in 2022 the bloc is expected to install more than 420,000 storage batteries leading to over 1 million homes across the continent being powered by solar and storage systems. Schmela rues that installations could have been much higher if it were not for the lack of installers and acute shortage of batteries, 'sharper than any other part of a solar system'.

At the end of 2022, R-BESS cumulative installed capacity is expected to grow to 9.3 GWh in Europe. Under its medium scenario, by 2026-end the report expects more than 300% growth in total operational R-BESS capacity growing to 32.2 GWh with 3.9 million solar and storage homes. Under a high scenario, it can leap further to over 44 GWh 'but also a third less if the right policy frameworks are not put in place'.

Out of top 4 European R-BESS markets covered in the report, namely Germany, Italy, Austria and the UK, SPE forecasts Germany to hold on to top spot over the next 5 years, followed by Italy. By 2026, Poland and Sweden will take 3^rd and 4^th positions, respectively.

"While mandatory solar for new and renovated buildings, as proposed by the European Commission, would also help the uptake of batteries, another crucial facilitator would be the integration of battery storage targets and national Clean Flexibility Plans in the upcoming revision for the member states' National Energy and Climate Plans (NECPs)," said SPE CEO Walburga Hemetsberger. "Ultimately, we need to ensure the creation of local flexibility markets to enable the business models for battery storage to support grid stabilization."

The report makes the following policy recommendations to increase the deployment of R-BESS systems in Europe to ensure energy security in the continent:

• To expand storage strategies in the form of clear national and EU targets for 2030 aligned with the EU ambition to deploy 1,100 GW AC solar and wind capacity.
• At the EU level, the commission should launch an EU Electricity Storage Strategy for 2030 for at least 200 GW target.
• Make solar mandatory for new and renovated residential buildings.
• Incentivize individual and collective self-consumption to optimize flexibility and congestion management.
• Accelerate regulatory frameworks for demand side flexibility.
• Set an appropriate sustainability framework for batteries through the EU Battery Regulation.

Raffaele Rossi, Head of Market Intelligence at SolarPower Europe, summarized, "The energy systems of today and tomorrow need coordinated policy efforts on electricity storage. In an energy crisis we can't afford to waste renewable-generated electricity because we don't have the means to store it. This means urgently setting EU and national storage strategies, as well as developing the right policy frameworks to support storage and self-consumption business models."