EuropeanMarketOutlookForResidentialBatteryStorage2022–2026GRIDGOESOFF.SUNGOESDOWN.LIFECARRIESON.Scanheretofindoutmorewww.solaredge.comFacingsoaringelectricitycostsandpotentiallyunstablegrids,moreandmorehomeownersareinstallingSolarEdgeHometoachieveenergyindependence.Thiscompletesmartenergyecosystemenablesyoutoproduce,storeandmanagesolarenergymoreefficientlyandcost-effectivelythaneverbefore.TheSolarEdgeHomeHubinverterprovidesPV,storage,andbackup,suitableforsingleandthreephaseresidentialinstallationsandiscompatiblewithourSolarEdgeHomeBattery400Vand48V.Plusthere’safullsuiteofsmartenergydevicesthatletyougrowyourSolarEdgeHomeasyourenergyneedsevolve.AndthemySolarEdgeappputsallthatpowerinyourhands.Allfromtheworld’s#1invertercompany!3ForewordWelcometoourEuropeanMarketOutlookforResidentialBatteryStorage2022-2026.WithanunprecedentedenergycrisisinEuropedrivingskyrocketingelectricitycosts,citizensareincreasinglylookingathomesolarpowergenerationasakeytooltogaincontroloftheirenergybills.Moreandmore,theclimatecrisiscontextcausescitizenstoturntheirbackonthepredominanceofpollutingandcostlyfossilfuels,whileriverdroughtsandageingfleetschallengethereliabilityofexistingnuclearpowerplants.Ascitizensseektohedgeontheirenergysupply,thedistributedsolarrooftopboombringswithitsomethingthatseemstobeoftenoverlookedinpolicycircles–amassivegrowthinresidentialbatteryenergystorage(R-BESS).OurlatestmarketoutlookshowsaR-BESSmarketthatmorethandoubledin2021to2.3GWh,afterthe1GWhannualinstallationlevelwasfirstreachedin2020.In2022,ourmost-likelyMediumScenarioforecastsanotherspectaculargrowthyear–theadditionof71%morecapacityof3.9GWh,whichwouldleadtoatotalinstalledR-BESScapacityof9.3GWhinEurope.Toputthisintomoretangiblenumbers–weestimateEuropewillinstallover420,000storagebatteriesin2022,resultinginmorethan1millionhomesacrossthecontinentpoweredwithjointsolar&batterystoragesystems.Itcouldhavebeenmuchmore,butalackofinstallersacrossEuropelimitedthegrowthofsolarsystems.Batteries,thecellsofwhicharegenerallyimported,arealsofacinganacuteshortage,sharperthananyotherpartofasolarsystem.Still,weareupbeattheresidentialsolar&storageboomwillcontinue.Bytheendof2026,ourMediumScenarioexpectsover300%growthofthetotaloperatingR-BESScapacityto32.2GWhattachedto3.9millionEuropeanhomes.Itcouldbeevenmore,ourHighScenarioanticipatesover44GWh,butalsoathirdlessiftherightpolicyframeworksarenotputinplace.Tounleashfurtherrapidgrowthofsolarandstorageanditsbenefits,weneedacomprehensivestrategyforelectricitystorage,andthisincludesanEUtargetofatleast200GWby2030.InEurope’sstrongestresidentialbatterystoragemarketGermany,whichhadamarketshareof59%in2021,R-BESSattachmentratestonewsolarsystemswereintherangeof70%,andarefurtherrising.Thismarket,whichhasdevelopedoverseveralyearsandhasalsoseveralstoragesystemassemblers,provesthatwell-thoughtincentiveschemesareveryhelpfultokick-startabatterystoragemarketuntilitcanstandonitsownfeet.Inordertoacceleratesolar&storagedeployment,wecallonEUpolicymakerstouseexistingfundstosupportthebatterycomponentinemergingresidentialsolarmarkets.Whilemandatorysolarfornewandrenovatedbuildings,asproposedbytheEuropeanCommission,wouldalsohelptheuptakeofbatteries,anothercrucialfacilitatorwouldbetheintegrationofbatterystoragetargetsandnationalCleanFlexibilityPlansintheupcomingrevisionforthememberstates’NationalEnergyandClimatePlans(NECPs).Ultimately,weneedtoensurethecreationoflocalflexibilitymarketstoenablethebusinessmodelsforbatterystoragetosupportgridstabilisation.Inaveryshortperiod,residentialbatterystoragehasestablisheditselfinahandfulofEuropeansolarmarkets.Intheleadingmarkets,batterystoragehasessentiallybecomeastandardcomponentofaresidentialsolarsystem.ThisshouldbereplicatedacrossEurope.It’snowtimeforEuropeanpolicymakerstorecognizeandfollowtheclearmarketsignalscomingfromtheircitizens,whoareseekingtruecontroloftheirenergybillsandaffordable,reliable,andcleanpowersupply–inotherwords,solar&batterystorage.WALBURGAHEMETSBERGERCEO,SolarPowerEuropeMICHAELSCHMELAExecutiveAdvisor,SolarPowerEuropeRAFFAELEROSSIHeadofMarketIntelligence,SolarPowerEuropeThankstoourSponsorMembers:EuropeanMarketOutlookForResidentialBatteryStorage2022–20264TableofcontentsForeword3Executivesummary5Policyrecommendations61Introduction72ResidentialsolarandstoragemarketsinEurope2021103ResidentialsolarandstoragemarketsinEurope2022-2026164Thetop4Europeanresidentialbatterystoragemarkets224.1.Germany244.2.Italy264.3.Austria294.4.UnitedKingdom31Projectlead:MichaelSchmela,SolarPowerEurope.Projectmanager:RaffaeleRossi,SolarPowerEurope.Authors:JonathanGorremans,ChristopheLits,RaffaeleRossi&MichaelSchmela,SolarPowerEurope.Textediting:BethanyMeban,SolarPowerEurope.Externalcontributors:EuPDResearch;PVAustria(AT);EDORA&ODE(BE);APSTE(BG);SEAPEK(CY);SolárníAsociace(CZ);BSW-Solar(DE);EuropeanEnergy(DK);HELAPCO(GR);MANAP(HU);ISEA(IR);AnieRinnovabili,ElettricitàFutura&ItaliaSolare(IT);REWS(MT);PolskieStowarzyszenieFotowoltaiki(PSF)&PolskieTowarzystwoFotowoltaiki(PVPoland)(PL);APREN(PT);RPIA(RO);SAPI(SK);ZSFV(SI);UNEF(ES);SvenskSolenergi(SE);SolarEnergyUK(UK).Contact:info@solarpowereurope.org.Pleaseciteas:SolarPowerEurope(2022):EuropeanMarketOutlookforResidentialBatteryStorage2022-2026.Published:December2022.ISBN:9789464669008.Design:Onehemisphere,Sweden,contact@onehemisphere.se.Methodology:SolarPowerEurope’sfive-yearforecastconsistsofLow,MediumandHighscenarios.TheMediumScenarioanticipatesthemostlikelydevelopmentgiventhecurrentstateofplayofthemarket.TheLowScenarioforecastisbasedontheassumptionthatpolicymakershaltsolarandstoragesupportandotherissuesarise,includinginterestratehikesandseverefinancialcrisissituations.Conversely,theHighScenarioforecaststhebestoptimalcaseinwhichpolicysupport,financialconditionsandotherfactorsareenhanced.ResidentialsolarandstoragesystemsaredefinedasinstallationswithaPVcapacitybelow10kW.SolarPowerEurope’smethodologyincludesonlygrid-connectedsystems.InstalledPVcapacityisalwaysexpressedinDC.AllfiguresarebasedonSolarPowerEurope’sbestknowledgeatthetimeofpublication.Disclaimer:ThisreporthasbeenpreparedbySolarPowerEurope.Itisbeingfurnishedtotherecipientsforgeneralinformationonly.Nothinginitshouldbeinterpretedasanofferorrecommendationofanyproducts,servicesorfinancialproducts.Thisreportdoesnotconstitutetechnical,investment,legal,taxoranyotheradvice.Recipientsshouldconsultwiththeirowntechnical,financial,legal,taxorotheradvisorsasneeded.Thisreportisbasedonsourcesbelievedtobeaccurate.However,SolarPowerEuropedoesnotwarranttheaccuracyorcompletenessofanyinformationcontainedinthisreport.SolarPowerEuropeassumesnoobligationtoupdateanyinformationcontainedherein.SolarPowerEuropewillnotbeheldliableforanydirectorindirectdamageincurredbytheuseoftheinformationprovidedandwillnotprovideanyindemnities.Unlessotherwisestated,thecopyrightandotherintellectualpropertyrightsofmarketintelligencedataandresourcesprovidedareownedbySolarPowerEurope.EuropeanMarketOutlookForResidentialBatteryStorage2022–20265ExecutivesummaryInaperiodcharacterisedbyadrasticriseinhouseholdelectricitypricesacrossEurope,residentialbatteryenergystoragesystems(R-BESS)havebecomeanattractivemeanstoreduceelectricitybillsandincreaseenergyresiliencewhileloweringcarbonfootprints.In2021,with2.3GWhinstalledoverthecourseoftheyear,theEuropeanresidentialbatterymarketgrew107%from2020,resultinginatotaloperatingfleetofmorethan650,000unitswithacumulativecapacityof5.4GWh.Forthesecondyearinarow,thehomestoragegrowthpathinEuropeturnedouttobesignificantlyhigherthanwhatwehadpreviouslyforecasted,withtheuptakeofhomestoragetechnologygoingbeyondthehighestexpectations.Infact,thegrowthinthemarketcouldhavebeenevenlarger,ifitwerenotforasevereshortageofbatteriesthatlimitedthepossibilitytomeetcustomerdemandandledtolengthydelaysofseveralmonthstogetproductsinstalled.TheriseofR-BESSisaconsequenceofthegreatsynergywithsolarPVinstallations,asitextendstheusageandapplicationofsolarpower.TherecentgrowthoftheresidentialsolarmarketacrossEuropehascreatedthefoundationforR-BESSmarketexpansion,evenmoresoconsideringthattheaverageattachmentratebetweenBESSandPVhasgrownfromgrownfrom23%in2020to27%in2021.Althoughmoreandmorenationalmarketsarelookingatsolar&storageasameanstodecreasedependencyfromvolatileelectricitypricesandmakebetteruseofself-producedgreenenergy,thedeploymentofthistechnologyisstilllargelydrivenbyahandfulofleadingcountriesinEurope.DrivenbyhighelectricitypricesandastrongattachmentratewithsolarPVinstallations,GermanyremainstheleadingEuropeanbatterystoragemarket.In2021,itinstalled1.3GWhofhomebatteries,withan81%annualgrowthrate.RankedsecondinthelistofEuropeanhomestoragemarkets,Italyhascertainlybeenthelargestsurprisein2021.TheItalianmarketskyrocketedto321MWhinstalledperannum,up240%from2020,thankstotheveryadvantageousconditionsofitsincentiveschemeSuperbonus110%.InAustria,thethirdlargestEuropeanmarketin2021,thediscontinuationofsubsidyschemesdidnotreducemarketgrowth,whichwasultimatelydrivenbyastrongincreaseintheresidentialPVsegment.Thecountrytripleditsannualmarket,whichreached132MWhand,byasmallmargin,surpassedtheUnitedKingdom,nowrankedfourthwith128MWhinstalled.Differentmarketconditionsallowedmanycountriestogrowinthetwoorthreedigitsrange,buttheincreaseinhouseholdelectricitypriceshasbeenacommonfactoracrossthecontinent.Thepoliticalandeconomiclandscapein2022,characterisedbyevenhigherelectricitypricesthanin2021,andenergysecurityconcernsofawarinEuropealsoonfossilfuels,hasimprovedthebusinesscaseforhomestorage.WeexpecttheresidentialBESSmarkettomaintainaveryhighgrowthpath:afterthemarketreached1GWhin2020and2.3GWhin2021,ourMediumScenarioexpects3.9GWhtobeinstalledin2022,up71%fromtheyearbefore.Overthecourseof2022,theremarkablethresholdof1millionhomeswithsolar&storagehasbeensurpassed.PositivemarketconditionsandsupportiveframeworksexpectedinmoreEuropeancountriesinthemid-termwillincreasethecontinent’sannualhomebatterymarketmostlikelyto7.3GWhby2026.Incumulativecapacityterms,theEuropeanbatteryfleetwillamountto9.3GWhbytheendof2022andreach32.2GWhin2026underourMediumScenario,withannualgrowthratesintherangeof30%oraboveforalltheinterveningyears.Underoptimalconditions,Europe’sresidentialprosumerscouldoperateabatteryfleetaslargeas44.4GWhbytheendof2026,comparedto23.2GWhinthemostpessimisticscenario.Thisreportanalysesthespecificfeaturesofthetop4largestEuropeanmarkets,whicharethesameaslastyear,althoughtheorderhaschanged.Inourfive-yearanalysis,Germanyispoisedtoremaintheundisputedleaderinthefieldofresidentialstorage,followedbyItalybysomedistance.These,togetherwiththeothertwoleadingmarkets,AustriaandtheUnitedKingdom,willstillconstitutethetop4marketsin2023,accordingtoourMediumScenario.By2026,however,PolandandSwedentakethe#3and#4positioninEurope.1.SetclearEUandnationalstoragetargetsfor2030,andadoptcleanflexibilityplans.InitsREPowerEUstrategy,theEUexpressedtheambitiontodeployover1,100GWACofsolarandwindcapacityby2030.1Suchexpansionofvariablerenewableenergycapacityneedstobematchedbyaparalleldeploymentofstorageandflexibilitysolutions.Tothisend,thereisanurgentneedtoestablishelectricitystoragestrategiesandstoragetargetsfor2030atbothEUandnationallevels.Settingacomprehensivestrategyforelectricitystorageincludingcleartargetsandanenablingregulatoryframeworkwouldgivelong-termvisibilityandcertaintytoinvestors,aswellasguidancetonationalandlocalauthorities.a.AttheEUlevel,theEUCommissionshoulddevelopandlaunchanEUElectricityStorageStrategyfor2030,replicatinginscopeandambitiontheHydrogenstrategy,includinganon-bindingelectricitystoragetargetofatleast200GW.EUpolicymakersshoulduseexistingEUfundstoacceleratestoragedeployment,andimprovetheregulatoryframeworktosupportthesolar&storagebusinesscase;b.Atthememberstatelevel,policymakersmustestablishtheconditionsforarapidstorageuptake,inparticularresidentialsolar&storage,whichneedsasupportiveregulatoryframeworktothrive.NationalCleanFlexibilityPlansshouldbedevelopedtomonitorperformance,assessneedsandsetdeploymenttargetsaccordingly.AkeymilestonewillbeintegratingsuchplansandtargetsintheupcomingNECPrevisionplannedfor2023-2024.OurextensiverecommendationsonthistopiccanbefoundinSolarPowerEurope’swhitepaperElectricitystorageforEUrenewabledeploymentandenergyresilience.2.Makesolarmandatoryfornewandrenovatedresidentialbuildings.Solarandbatteriesperformattheirbestwhentheyarecombined.ThisiswhymoreandmorenewresidentialPVsystemscometogetherwithabatterywhentheyareinstalled.Tospeeduptherolloutofhomestoragetechnology,rooftopsolardeployment,especiallyonresidentialrooftops,shouldbemaximised.ThesolarrooftopmandatefornewandrenovatedresidentialbuildingsasproposedbytheEuropeanCommissionaspartoftheEnergyPerformanceofBuildingsDirective(EPBD),shouldbetransposedatnationallevelassoonaspossible.3.Incentiviseindividualandcollectiveself-consumptiontooptimiseflexibilityandcongestionmanagement.Self-consumptionisthefirstformofdemand-sideflexibility:itincentivisesconsumerstoflexibilisetheirconsumptionandbringitclosertogeneration.Memberstatesshouldincentiviseself-consumptioncomparedtogridfeed-intoincreasetheattachmentratebetweensolaronbuildingsandBESS.Theseconfigurationshelpdecreaseelectricitypricevolatility,reduceneededgridcapacity,andshieldend-usersfromhighenergyprices.Similarly,peertopeerelectricitytrading,orcollectiveself-consumption,couldsupportcongestionmanagementatlocallevel.Individualself-consumptionframeworksshouldbefurtherpromotedatnationallevel,andintegratedinDSOplanning.4.Accelerateregulatoryframeworksfordemandsideflexibility.DSOsmustevaluatetheirflexibilityneedsastheydrafttheirnetworkdevelopmentplansandsetupframeworkstounlockandincentiviseflexibility.Aspartofthis,itisimportanttoroll-outlocalflexibilitymarketsandfinalisethenetworkcodeondemandsideflexibilityassoonaspossible.Non-marketflexibilitysolutionsshouldalsobepromotedinparallel.5.SetanappropriatesustainabilityframeworkforbatteriesthroughtheEUBatteryRegulation.EUco-legislatorsareexpectedtofinalisethetrialoguenegotiationsregardingtheEUBatteryRegulationtowardsthebeginningof2023.Thisnewregulationwillenhancethesustainabilityandsafetyfeaturesinbatteries,includingstationarystorageapplications.Thenewrulesmustavoidinappropriateminimumrecycledcontentobligationsandoverlyprescriptivedesignanddataaccessrequirements.EuropeanMarketOutlookForResidentialBatteryStorage2021–202561Brokendowninto510GWwindand600GWACsolar,whichisequivalentto750GWDC.PolicyRecommendationsEuropeanMarketOutlookForResidentialBatteryStorage2022–20267Introduction1©SolarEdgeFollowingthesevereimpactsoftheCOVID-19healthemergencyonEuropein2020,withsignificantlockdownmeasuresenforcedinmanycounties,thefollowingyear,2021,thecontinentfacedanewsetofcrises.WiththeglobaleconomyregainingtractionaftertheCOVID-19inducedslowdown,alsothedemandforenergygrewandledtoasignificantriseinprices,includingelectricity.Thisincreasewasreflectedonhouseholdsaswell.IntheEuropeanEconomicArea,averageresidentialelectricitypricessurpassedforthefirsttime0.19EUR/kWhin2021andcontinuedgrowingthroughouttheyear.TheRussianinvasionofUkraineinFebruary2022hasledtoacontinent-wideenergycrisisand,asthewarcontinues,acceleratedtheelectricitypricetrendtonewheightsin2022(Fig.1.1).FIGURE1.1AVERAGEELECTRICITYPRICESFORHOUSEHOLDCONSUMERSINTHEEU2008-202200.050.100.150.200.250.30EUR/kWhPricesexcludingtaxesPricesincludingtaxes2008S12008S22009S12009S22010S12010S22011S12011S22012S12012S22013S12013S22014S12014S22015S12015S22016S12016S22017S12017S22018S12018S22019S12019S22020S12020S22021S12021S22022S10.160.250.190.11Source:Eurostat,2022.©SOLARPOWEREUROPE2022Withinthiscontext,moreandmorehouseholdsacrossEuropeareturningtosolarPVandbatterystoragetoreduceelectricitybillsandincreaseenergyresiliencewhileloweringtheircarbonfootprints.TechnologicaladvancementshaveseenBatteryEnergyStorageSystems(BESS)followingthesamepatternofsteeplydecliningsolarPVcostsandpricesthathavemadethistechnologythemostaffordablesourceofenergyinmanyregionsaroundtheworld.Thesignificantgrowthofbatterystoragetechnologies,includingintheelectricmobilitysegment,iscontributingtoasuccessfulcostreductionstoryforthesector.Despiteariseinbatterypricestakingplacein2021andcontinuingin2022–duetopost-lockdownglobaltradeandeconomicconditionsandsoaringenergyprices–adecreasingtrendinthecostofbothsolarPVandBESSapplicationsisexpectedtocontinueinthemediumterm(Fig.1.2).Againstthisbackground,thespreadbetweenincreasingretailpowerpricesandsolar&storagepowerpricesiswidening.Thistrend,alreadyvisiblein2021,hasbecomeapparentin2022asenergypricesacrossEuropehaveskyrocketedtoall-timehighsandgovernmentshaveintroduceddifferentformsofemergencymeasurestocurbtheimpactsonhouseholdsandbusinesses.1Introduction/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–20268FIGURE1.2SURVEYOFRESIDENTIALSOLAR&STORAGEPRICESINGERMANY,2017-2025002002004004006006008008001,0001,0001,2001,2001,4001,4001,6001,6001,8001,800EUR/kWpEUR/kWhPV7kWpBESS<6kWh20182019202020212022e2023e2024e2025e2017Source:EUPDResearch,2022.©SOLARPOWEREUROPE2022Atthesametime,whilepowerfromsolarrooftopsystemshasalreadybeenmuchcheaperthanretailelectricityinmostEuropeanmarketsforseveralyears,nowbatterystorage’srapidcostimprovementsisalsonowenablingsolar&storagetobeatgridpowerinanincreasingnumberofEuropeancountries.InGermany,the‘best-in-class’intheresidentialsolar&storagesegment,theLevelisedCostofElectricity(LCOEs)forsolar&storagesystemsslightlyincreasedto14.7Eurocents/kWhlastyear,whichwaswaslessthanhalfoftheelectricitypriceatthetimeofaround32Eurocents/kWh.Whilesolarsystemcomponentpricesandinstallationcosthaveincreasedasaresultofproductandlabourshortage,andalsoinflationduring2022,skyrocketingelectricitypricehavemadethebusinesscaseforsolarandstorageonlymoreattractive.Atthetimeofdraftingthisreport,theEuropeancontinentissubjecttoextremeenergypricevolatilityduetotheRussianwaronUkraineandismakingconcertedefforttodecreasedependencyonRussianfossilimportsandincreasethecontinent’senergyresilience.Underthecurrentcircumstances,itishardtoimaginethatretailelectricitypriceswilldecreaseintheshorttomediumterm.Bycontrast,thetemporarypriceincreaseofLCOEsofbothstandalonesolarandsolar&storageisexpectedtocometoanendasthecomponentpricecrisisisaddressed.Atpresent,thebusinesscaseforsolar&storagegoesbeyondthemereeconomicattractiveness.Manyhouseholdsareinterestedinthesetechnologiesbecauseoftheirpromiseofenergysecurity–eventhoughinmostEuropeancountries,gridfailuresseemanunlikelypossibility,itisamuch-debatedtopicinmedia.Thus,thepsychologicalaspectshouldnotbeunderestimated,asitcandrivemarketsevenmorethaneconomicfactors.Europeanandnationalpolicymakerslookingforfast,affordable,andlong-termsolutionstotheirenergyneedswillfindinsolar&storageaversatileandlow-costoptiontoshieldend-customersfromsoaringelectricityandgasprices.Addingtothat,theelectrificationoftheheatandtransportsectoracrossEuropewillrequiresmartsolutionstoincreasedpowerdemandattheresidentiallevel.SolarPV,batteries,heatpumpsandelectricvehiclesallinteractverywellwitheachotherandcancreatetherightsynergiesforarapidphaseoutoffossilfuelsacrossallsectors,iftherightpolicyframeworkconditionssupportthisdevelopment.EuropeanMarketOutlookForResidentialBatteryStorage2022–20269©SolarwattEuropeanMarketOutlookForResidentialBatteryStorage2022–2026102020sawresidentialbatteryenergystoragesystems(R-BESS)trulyemergeontheenergymapinEurope,withtwomajormilestonesachieved:itwasthefirstyearwhentheannualmarketreachedtheGWhscale;andalso,forthefirsttime,morethan100,000batteryunitswereinstalledinonesingleyear.In2021,thehomebatterymarketenteredanewphase.Withmorethan2GWhinstalledoverthecourseoftheyear,themarketbasicallydoubledcomparedtothepreviousyear–tobeprecise,itgrew107%(Fig.2.1).Suchasteeplevelofgrowthhadn’tbeenregisteredsince2014;butbackthen,themarketwassignificantlysmallerandhadincreasedtojust64MWhcomparedto30MWhtheyearbefore.Toputthisintoperspective,thesizeoftheR-BESSmarketin2021was35timeslargerthanin2014.Thatyear,onlyabout9,000batterieswereinstalled,whilein2021about260,000unitshavebeenadded.Remarkably,thegrowthinthemarketcouldhavebeenevenlarger,ifitwerenotforasevereshortageofbatteriesResidentialsolarandstoragemarketsinEurope20212©TeslaFIGURE2.1EUROPERESIDENTIALBESSANNUALMARKET2013-202105001,0001,5002,0002,500MWh201520162017201820192020202120132014306411920359%46%107%3441,1092,294477760©SOLARPOWEREUROPE2022limitingthepossibilitytomeetcustomerdemandandcausing,months-long,lengthydelaystoinstallR-BESSproducts.Thisissuewasparticularlyfeltinlessdevelopedmarkets,wherethesuddenspikeindemandcaughtdistributorsbysurpriseastheystruggledtofindproductsfortheirclients.EvenmatureR-BESSmarketshavebeensufferingfromalackofbatteries,whichcontinuetobethemissingproductlinkforsolarsystemtechnologyaftermodulesshortageshavebeensolvedandinvertershortagesarebeingaddressed.Overthelastyears,thecontinentreliedonahandfulofR-BESSpioneers,primarilyEurope’slargestsolarmarketGermany,whichisalsothecountrywiththelargestR-BESSinstalledresidentialbatterystoragevolumebyfar.InGermany,homestoragestartedfirstgainingtractionafteritswitchedfromafullFeed-inTariff(FIT)schemetoamodelsupportingself-consumption,incombinationwithapremiumforexcesspower,andbackedbyanattractiveR-BESSsubsidyprogrammeofitsdevelopmentbankKfWthatwasslowlyphasedout.Later,homebatterymarketsstartedtoemergeaswellinafewothercountries–Italy,theUnitedKingdom,andAustria–whilehardlyanycapacitywasinstalledintherestofEurope.Today,R-BESStechnologyapplicationscanbeseeninaquicklygrowingnumberofEuropeancountries,and,asvolatileenergypricesreachingunknownheightsareseverelyaffectinghouseholdsacrossthewholecontinent,thehomestoragebusinesscaseisbecomingappealinginmanydifferentEuropeanregions.Forthesecondyearinarow,thehomestoragegrowthpathinEuropeturnedouttobesignificantlyhigherthanwhatwehadpreviouslyforecasted.Inlastyear’seditionofthisreport,weassumedthemarketwouldgrow28%to1.4GWh.Thepositiveevolutionofthemarketconditionsexceededevenourmostoptimisticexpectations:ourHighScenarioanticipated1.8GWhofannuallyinstalledcapacity;actualinstallationswere27%higher.Theexceptionalincreaseintheannualmarketiswellreflectedinthegrowthofthetotaloperatinghomestoragecapacity.TheresidentialBESSfleetjumpedfromjustover3.1GWhin2020to5.4GWhin2021,witha74%year-on-yearincrease(seeFig.2.2).Unlikelastyear,theannualmarketgrowthrateishigherthanthegrowthrateincumulativecapacity,asignthatthetotaloperatingfleethasreachedsubstantialvolumesandthetechnologyisenteringanewdeploymentphase.TotalR-BESScapacityhasgrown13timesitssize,comparedtojustfiveyearsago.EuropeanMarketOutlookForResidentialBatteryStorage2022–202611FIGURE2.2EUROPERESIDENTIALBESSCUMULATIVEMARKET2013-202101,0002,0003,0004,0005,0006,000MWh20152016201720182019202020212013201430942134167605,40061%56%74%1,2371,9973,106©SOLARPOWEREUROPE20222ResidentialsolarandstoragemarketsinEurope2021/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202612AnimportantaspecttohighlightisthattheattachmentratebetweenhomestoragesystemsandresidentialPVsystemsisrising.In2021,foreverynew10residentialPVsystemsinstalledacrossEurope,2.7homebatterieswereinstalled(Fig.2.3).However,itshouldbespecifiedthatnotallnewbatteriesareinstalledtogetherwithanewPVsystem,assomeusersalreadyequippedwithresidentialsolardecidetoretrofittheirexistingPVsystemwithanewbatteryatalaterstageSofar,R-BESSretrofitactivityhadbeennegligiblecomparedtonewinstallationsinthepast.Butthestrongriseinelectricityprices,andanincreasingnumberofsolar-onlysystemsexitingtheirlong-termfullfeed-intariffcontracts,willhavethissegmentbecomenotableaswell.However,aslongasthereisashortageofproductandinstallers,thesalespreferenceofinstallersistobuildsolar&storagesystemsasthesepromisehigherrevenuesandprofits.AsR-BESSsysteminstallations–retrofitsandnew–aregenerallynotrecordedunderregulators’renewableenergystatistics,itischallengingtodeterminetheaverageEuropeanattachmentrateofnewBESSwithnewPVsystems.Estimatesarebasedoninterviewswithsolar&storagestakeholders.In2021,roughly14ofresidentialPVsystemsoperatingacrossEuropewereequippedwithbatterystorage–that’sa3percentagepointincreasefromthe11%operatingtheyearbefore.Eventhoughtheattachmentratebetweensolarandstorageisincreasing,theuntappedmarketpotentialforBESSremainshuge,evenmorewhenconsideringthatover90%ofEuropeanbuildingsarestillwithoutsolarsystems.FIGURE2.3EUROPEANNUALANDCUMULATIVEBESS/PVATTACHMENTRATE,2020-2021051015202530%20202021ARCumulativeARAnnual23%11%27%14%©SOLARPOWEREUROPE2022EuropeanMarketOutlookForResidentialBatteryStorage2022–202613TheTop5EuropeanResidentialStorageMarketsGermanyremainstheleadingEuropeancountryininstallationsofbothresidentialsolarPVandresidentialbatterystoragesystems(seeFig.2.4).In2021,around150,000residentialBESSwereinstalledinthecountry,foratotalnewcapacityofabout1.3GWh.ThecentralroleofGermanyintheEuropeanhomestoragemarketcannotbeunderestimated.However,althoughstillthecountrycurrentlyprovidingthevastmajorityofthetotalEuropeanannuallyinstalledcapacity,witha59%share,itspredominanceisdecreasing,down9%absolutecomparedtothepreviousyear.TheannualinstalledcapacityinGermanyin2021ishigherthanthewholeEuropeanhomestoragemarketin2020.In2021theGermanannualBESSmarketgrew81%from2020,when749MWhwasinstalled.ThisgrowthismainlyduetoasurgeofresidentialPVsystemsinstallations,thecapacityofwhichincreasedby1.8GWin2021,thecountry’sbestannualperformanceeverforthesmallrooftopsegment.ThestrongincreasingrateofR-BESSinstalledperannumculminatinginanotherrecordyearisaconsequenceofacoherentstrategy,atleastwhencomparedwithmostotherEuropeanmarkets.Germany’sR-BESSperformancecanbeattributedtheactivebuildingofastrongdistributedsolarmarketasthefoundation,thetransitiontoself-consumption,andtheincentivisationofBESSbehind-the-meterwithnation-wide,GermanDevelopmentBankKfW,financialsupporttoestablishasolar&storagemarketthatenablesconsumersturnintoprosumers.WhiletheKfWBESSincentiveendedin2018,theBESSsalesinfrastructurewasthenreadytosupportgrowingdemandforsolar&storageinabusinessenvironmentthathasmadethiscombinationonlymoreattractive.SonowwecanseethatonlytherightpolicyframeworksarenecessaryinGermanytosupportstorage,withfinancialsupportnolongernecessary.In2021,theattachmentwithresidentialsolarfurtherimprovedtoabout70%,comparedto59%in2020.FIGURE2.4EUROPETOP5RESIDENTIALBESSMARKETS2020-202102004006008001,0001,2001,4001,600MWh20212020ItalyUKAustriaSwitzerlandRestofEuropeGermany©SOLARPOWEREUROPE20222ResidentialsolarandstoragemarketsinEurope2021/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–20261441MWhin2020to132MWhin2021.Thisequalstoroughly13,000residentialbatteriesinstalledin2021.Thefourthlargestmarket,theUnitedKingdom,keptitsupwardpathwithoutsubsidiesin2021.With128MWhofannualadditionsanda58%growthoverthepreviousyear,theUKmarketbenefittedfromtheupwardswingofitsresidentialPVsegment,whichgrew207%to153MWin2021,andaccountedfor17,000residentialstorageunitsinstalled.This,however,wasnotsufficienttoretainrank#3asin2020intermsofcapacityinstalled.Despitethelackofdirectsubsidiesforhomestorage,since2020prosumersareofferedspecifictariffstructuresbyenergyretailerstorewardtheexportofrenewableelectricitytothegrid,whichprovidesanincentivetoadoptbatterystoragesolutions.TheSwisshomebatterymarketremainsanimportantplayerintheEuropeanlandscape,andended2021onrank5.The6,300unitsinstalledin2021resultedin79MWhofannualcapacityadditions,suggestinganaveragebatterysizethatissignificantlyhigherthanitsEuropeanpeers.Astrongself-consumptionsegmentsupportedbyafavourableregulatoryframeworkresultedinathree-foldmarketgrowthyear-on-year.ItalyiscertainlythelargestsurpriseacrossEuropeanhomestoragemarketsin2021.ThepositiveeffectsoftheSuperbonus110%,thefiscalincentivethatwasintroducedinMay2020aspartoftheCOVID-19nationalrecoveryprogram,startedtofullyflourishin2021.TheItalianannualhomestoragemarketjumpedfrom94MWhin2020to321MWhin2021,increasingbyoverthreetimesyear-on-yearandtotallingmorethan31,100newunitsin2021.Thishighlybeneficialtaxcreditschemeallowedhomeownerstodeductupto110%oftheexpensesrelatedtohomeenergyefficiencywork,whichcomprisealsoPVandBESSsystemsinstallations.Italycontributed11%oftotalEuropeanhomebatteryinstallations,solidifyingits#2rankanddistancingitselffromtherestoftherunners-up.Austria,whichwasEurope’s#4in2020,gainedonespotandenteredthetop3,withthebatterymarketdrivenbytheexpansionofitssolarpeer.Despitesubsidyprogrammesforresidentialstoragebeingdiscontinuedin2021,andmuchlowerretailpowerpricesthanGermany,thecountryexperiencedalargegrowthinannualbatteryadditions.ThiswaslargelyduetotheincreaseintheresidentialPVsegment,whichgrew143%to348MWin2021.Thebatterymarketbasicallytripleditssize,growing223%fromFIGURE2.5EUROPETOP5RESIDENTIALBESSMARKETS2021RestofEurope:280MWh,12%Switzerland:79MWh,3%Austria:132MWh,6%UK:128MWh,6%Italy:321MWh,14%Germany:1,354MWh,59%©SOLARPOWEREUROPE2022EuropeanMarketOutlookForResidentialBatteryStorage2022–202615remainedbelow5%.AquitedifferentsituationcanbeseeninFrance,whereinterestinbatterieskeepsgrowing,butatmuchlowerpace.ComparedtootherEuropeancountriesofsimilarsize,in2021,itsbatterymarketremainedverysmallconsideringitspopulationof67.5million.InSweden,continuedgrowthintheresidentialPVandhomestoragesectorweredrivenandsupportedbysubsidiesforresidentialsolar&storage.AnotableabsencecontinuedtobetheNetherlands–despitehavingoneofthelargestEuropeanresidentialPVmarketsandthecontinent’shighestpercapitasolarinstallationrate,itcontributedverylittletoEurope’shomestoragedeployment.TheDutchresidentialsolarmarketislargelygovernedbyitsnet-meteringpolicywhich,inpractice,makesthegridavirtualbatteryforsolarsystemoperators,andseverelyreducestheattractivenessofstorage.However,asnet-meteringissoonstartingitslong-termphaseout,thismarketmightalsoemergeontheEuropeanhomebatterymap.Despitethisoutlook,theNetherlandswilllikelytakemanyyearstodevelopprominence,asnet-meteringlevelswillstayhighforthecomingyears.Intotal,theTop5Europeanresidentialstoragemarketswereresponsiblefor88%ofthe2021installedcapacityintheregion.In2021,inallotherEuropeancountries,theresidentialbatterystoragemarketremainedinearlydevelopmentorwasstillbasicallynon-existent.However,afewnotablemarketsrapidlystartedtogaintraction.Countriesoutsidethetop5added280MWhin2021,whichis137%morethanthe118MWhinstalledtheyearbefore;buttheaggregatecapacityinstalledin2021byover30countriesremainsbelowtheannualadditionsofEurope’ssecondlargestmarket,Italy.EmergingmarketsthataresettoplayabiggerroleincludeSpainandPoland,whoarebothcharacterisedbythrivingresidentialPVmarkets–thoughthelatterispresentlymuchlargerthantheformerinabsoluteterms.Astheattractivenessofself-consumptioninthesetwomarketsisbeginningtohaveapositiveimpactonbatteriesaswell,theyareexpectedtobecomeimportantplayersintheEuropeancontext.In2021,however,theircombinedannualmarketshare©SolarEdge2ResidentialsolarandstoragemarketsinEurope2021/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202616Lookingatthenextfiveyears,thequestionisnotwhethertheresidentialBESSmarketwillcontinueitsupwardspath,butratherhowsteepthegrowthcurvewillbe.Inrecenttimes,therapiddevelopmentofbatterystoragecaughteveryonebysurprise,overshootingexpectationsbyalargemargin.Thecurrentpoliticalandeconomicenvironment,characterisedbyhighelectricitypricesandenergysecurityconcerns,hasstronglyimprovedthecaseforhomestorageinEurope–bothfromabusinessandapsychologicalpointofview.AstheCOVID-19recoverypackagesandothermeasurescontrastingtheenergycrisisbecomeavailabletoEuropeanshouseholds,weexpecttheR-BESSmarkettomaintainasustainedgrowthpath.AftertheEuropeanresidentialbatterymarketpassed1GWhin2020and2GWhin2021,ourMediumScenarioexpects3.9GWhtobeinstalledin2022,up71%fromtheyearbefore(Figure3.1).Comparedtolastyear’soutlook,wehavesignificantlyrevisedupwardsourexpectations:the2022marketsizeweforecastthisyearstandsabovethe2025HighScenarioweanticipatedoneyearago.Followingasteeptwo-digitgrowthtrajectory,ourrevisedMediumScenarioforecastsR-BESSdeploymentof4.5GWhin2023,5.1GWhin2024,6.0GWhin2025and7.3GWhin2026.FIGURE3.1EUROPERESIDENTIALBESSANNUALSCENARIOS2022-2026024681012GWhHistoricaldataLowScenarioHighScenarioMediumScenario202220232024202520262017201820192020202171%11%19%22%16%2.311.35.23.04.5©SOLARPOWEREUROPE2022ResidentialsolarandstoragemarketsinEurope2022-20263©SolarwattEuropeanMarketOutlookForResidentialBatteryStorage2022–202617Intheshortterm,muchwilldependonhowfastthecurrentkeybottleneckforthissegment,theshortageofbatteryproductsupply,canbeaddressed.EuropeisstronglydependentonR-BESSproductsfromAsiansuppliers;evenEuropeanR-BESSmanufacturersmostlyassembletheirsystemsusingimportedbatterycells.Theshortagehasbeensoacutethatthefirstmajorvertically-integratedChinesesolarmodulemanufacturershaveexpandedintobatterycellproduction.AsthetransitionofthecarindustrytoEVsgainsspeed,thereisfiercecompetitionformanyoftherawmaterialsneededtoproducelithium-ionbatteries,asthetechnologyusedinbothindustries–andthiscompetitionwon’tgoawaythisyearorthenext,despiterapidexpansionofgiganticbatterycellmanufacturingcapacities.However,moreBESSproducthasbeenavailablein2022thanthepreviousyear,andweexpectvolumestoincreasealsointhecomingyearsofthisoverview,eventhoughtheshortagewillagainlimitR-BESSgrowthin2023.However,thedesireforenergysecuritythroughbatteriesisoftensostrongthatpeopleinstallingsolarnow,alreadypreparetheirsystemwithhybridinvertersthatenableeventualdeliveryofaR-BESSsystem.Inthemediumtolongterm,itwillbecrucialtopreservethemomentumofrooftopsolarandbatteries,asbatteriesareakeycomponenttoenableconsumerstransformationtoprosumers,andtheysupportdistributedgridstabilisationinarenewable-basedenergysystem.UnderREPowerEU,theEUCommissiongavetosolaracentralroleinthestrategytodetachtheEUeconomyfromRussianenergyimports.ArapidandeffectiveimplementationofREPowerEUprovisionswouldequipmemberstateswiththerighttoolstopromoteresidentialsolar,aswellasbatterystorage.IntegratingsupportivepoliciesintheEUmemberstates’NationalEnergyandClimatePlans(NECPs)revisionprocessplannedfor2023-2024wouldfurtherdrivetheEUmarket.Asaresultofimprovedmarketconditions,allthreescenarioshavebeenrevisedupwardssignificantlyfromourpreviousprojections.UndertheLowScenario,weanticipateworsenedtradeconditions,sustainedsupplychainchallengesandothernegativemarketimpacts.Bycontrast,swiftadaptationofsupplychainstomarketdemand,pairedwithimprovedsolar&storagepolicyframeworks,andstrongcommitmentfrompolicymakersarethebaseassumptionforourHighScenario.©TeslaEuropeanMarketOutlookForResidentialBatteryStorage2022–202618FIGURE3.2EUROPERESIDENTIALBESSCUMULATIVESCENARIOS2022-202601020304050GWhHistoricaldataLowScenarioHighScenarioMediumScenario44.410.68.423.273%36%32%29%49%5.4©SOLARPOWEREUROPE2022Although2022willbesoonending,wehavekeptafairlywiderangeof2.2GWhbetweentheLowScenarioadditionsof3GWhandtheHighScenario,reaching5.2GWh.Indeed,themarkethasbeengrowingstronglyinthefirstthreequartersoftheyear,whiledemandwasmuchhigher,butitremainstobeseenwhatwillactuallybeinstalledinayearcharacterisedbybatteriesasthemajorproductsupplybottleneckinaresidentialsolarsystem.EventhepessimisticexpectationsoftheLowScenarioareforeseeingastronglyexpandingmarketin2022,with3GWhofstoragecapacityinstalledanda30%year-on-yeargrowth,whereasthe5.2GWHighScenariowouldresultina128%growth.Althoughthismightappearbeyondreasonableexpectations,thestronggrowthofthestoragemarkethasbeenverymuchasurprisein2021aswell.By2026,theEuropeanhomestoragemarketcouldbeaslargeas11.3GWh,accordingtoourHighScenario,whiletheunlikelyLowScenarioforeseesamarketsizeof4.5GWh,abouttwiceaslargeasin2021.Whenlookingattotalinstalledresidentialbatterystoragecapacities,ourEuropeanMarketOutlook2022-2026showsveryhighgrowthratesoverthecomingyears(Figure3.2).Asamarketsegmentwhosepotentialisstilltobediscovered,theannualgrowthof74%in2021willbefollowedbya73%increasein2022.Thenext4yearsaresupposedtoseelowertwo-digitgrowthR-BESSratesintheMediumScenario,linkedtothegrowthoftheresidentialsolarrooftopmarketandbasedonincreasingattachmentratestosolarsystems.InourMediumScenario,weexpectthecumulativeresidentialstoragecapacityinstalledacrossEuropetoreach9.3GWhin2022,13.9GWhin2023,18.9GWhin2024,24.9GWhin2025and32.2GWhin2026.Associatedgrowthratesareconsistentlyabove29%foralltheinterestedyears.UndertheoptimalconditionsanticipatedintheHighScenario,Europe’sresidentialprosumerscouldoperateabatteryfleetaslargeas44.4GWhbytheendof2026,comparedto23.2GWhintheLowScenario.3ResidentialsolarandstoragemarketsinEurope2022-2026/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202619LocalDevelopmentsOverthecomingyears,weexpectthatGermanywillretainitsleadingroleinthefieldofresidentialstorage,supportedbyastableresidentialPVmarket,andflankedbyambitiousclimateandenergygoals.ThelargestEuropeaneconomyneedstourgentlycurbitsdependenceonfossilimports,anditshighretailenergypriceswillensurethattheeconomicsofsolar&storageremainveryappealing.WhileitisnotsurprisingthatGermanywillkeepits#1role,ItalyisanticipatedtogetclosetotheGermanlevelin2022.ThankstoitsextremelyattractiveincentiveschemeSuperbonus110%,theItalianmarketisexpectedtogrowmorethanthree-foldandexceedtheGWhscaleforthefirsttime,onlyoneyearafterGermanyreachedthatmilestonein2021.DuetotheirresidentialPVmarketssurgingin2022,theUnitedKingdomandAustriaaresettolargelyincreasetheirBESSmarketsaswellandtakerank#3and#4respectivelyin2022.NewplayerslikePolandandSpainarealsoappearingonthehorizon,whiletheattractivenessofBESStechnologysignificantlyincreasesthroughoutthecontinent.InGermany,thehomestoragesegmentisexpectedtofollowthepathofitsresidentialsolarpeer.Strongdemandforsolar&storagesolutionstoshieldhouseholdsfromhighelectricitypricesandtocurbthefearofblackoutsbringtheR-BESSmarketto1.5GWhanda14%growthundertheMediumScenario.Thebottleneckcausedbyalackofinstallersandthecurrentunavailabilityofproductspreventslargergrowth,whichhowevercouldbecomemorevisiblein2023.Atpresent,theveryhighattachmentratebetweenbatteriesandresidentialsolar,estimatedintherangeof80%,showsthatR-BESSbecomealmostpartofastandardsolarsysteminGermany,ensuringthatthemarketexpansionwillremainstableaslongasthehomerooftopmarketgrows.Weexpectinstallationstoreach2.6GWhin2026,abouttwiceasmuchasin2021.ItishardtooverestimatetheimpactoftheSuperbonus110%ontheItalianmarket.Withthesupportmeasureinfullswingin2022,thecountrywillcomfortablyreachtheGWhlevelofannualinstallationsandin2022willbeplayinginthesameGWh-leagueofGermany.Afterastrong2023,thereducedattractivenessofthesupportframeworkforstorageisbelievedtobringbackthemarketbelowtheGWhscale.©Tesla3ResidentialsolarandstoragemarketsinEurope2022-2026/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202620AnewcomerontheEuropeanpodiumin2021,theresidentialstoragemarketinAustriahasbrightdaysahead.Itsgrowthissupportedbythenation’sambitiontoinstall1millionrooftopPVby2030andbyseveralsubsidiesavailableforstorageatstatelevel.Themarketwillfollowastable2digitgrowthpath,comfortablycrossthe300MWhmarkby2024,andreacharound450MWhby2026.OntheothersideoftheChannel,theUnitedKingdomisridingonitsownatthepacedictatedbyafreemarketenvironment.Theyear2022willbeagamechangerthatelevatesthemarkettojustbelow300MWh,morethandoublingfrom2021’slevel.However,thelackofsupportingschemeandtheslowpaceofsmartmeterrolloutindicatethatthecomingyearsareexpectedtostabiliseatthecurrentlevel,withapossiblesmalldeclinein2023whentheimpactfromtheUkrainianwaronelectricitypricewilltemper.ThemarketinSwitzerlandwillfollowoneofthemostsustainedpathscomparedtootherEuropeancountry.ThewellestablishAlpinemarketbenefitsfromsubsidiestosupportitsgrowth.AboutonenewresidentialPVsystemoutofthreeisnowcombinedwithstoragesolutionandtheattachmentrateisexpectedtoriseinthecomingyears.Underthoseconditions,weexpectthemarkettodoubleinthenextfiveyears,from118MWhin2022toalmost240MWhin2026.France,thoughoneofthekeymarketsforPVinEurope,willremainquitelowinthecomingyearsbecauseofalackofincentivesandarelativelycheapretailelectricityprice.Therelativegrowthofthecountrywillbeimpressiveasthemarketisanticipatedtotriplefrom56MWhin2022to148MWhin2026.Butinabsoluteterms,by2026themarketwillstillbethesmallestofallthekeycountriesweevaluateinthisreport.Onthecontrary,newplayerswhohavesurfacedonthescenein2022areexpectedtobecomekeymarketsinthecomingyears.Firstandforemost,Polandisprojectedtobethethirdcountryintermsoftotalbatteryadditionbetween2022and2026,justbehindGermanyandItaly(Figure3.3).TheEasternEuropeancountryisoneofthelargestrooftopPVmarkets,supportedbyanet-meteringprogramthatendedin2022andhasbeenreplacedbyanewincentivescheme.Furthernorth,Swedenisamarkettokeepan©sonnenEuropeanMarketOutlookForResidentialBatteryStorage2022–202621eyeon.WeanticipateittobecomethefourthlargestEuropeanmarketforresidentialbatteriesby2026.TherapiduptakeoftheresidentialPVmarket,combinedwithsubsidiesforstorage,createsaperfectmixfortheR-BESSmarkettoexpand.ThecountryisalsothefirstmarketforelectricvehiclesintheEU,wheretheshareofnewelectriccarsalesreached43%in2021,accordingtotheIEA.IntheIberianPeninsula,SpainiscreatingitselfasweetspotontheEuropeanresidentialstoragescene.Asubsidyprogramisinplacetosupportinvestments,atatimewhenmanyconsumersarevulnerabletowholesalemarketfluctuationsandarelookingtoprotectthemselvesagainsthighenergybills.AbigR-BESSdisappointmentontheEuropeanstageistheNetherlands.ThismajorEuropeanPVrooftopmarkethasthepotentialtobecomeamonumentalmarketforresidentialstorage,whichcouldalsohelptoaddressitsincreasinggridcongestion,butthepresenceofitsnet-meteringschemehampersthebusinesscaseforbatterystorageandseverelylimitsitsgrowthperspectives.Thenet-meteringprogrammewilleventuallybephased-outby2031,butasitiscurrentlyuncertainunderwhichconditionsthiswillhappen,wedonotseeanybigpositiveR-BESSmovementinthecomingyears.FIGURE3.3EUROPETOP5MARKETSRESIDENTIALBESSADDITIONS2022-2026ItalyUKAustriaPolandGermanyGWh02.04.06.08.010.012.014.016.0MediumScenarioHighScenarioLowScenario13.78.02.62.32.47.63.00.91.10.9©SOLARPOWEREUROPE2022Thelargestresidentialbatterymarketsin2021areGermany,Italy,AustriaandtheUK.Together,theyinstalled1.9GWhofresidentialstoragebatterycapacity,representing84%ofthe2.3GWhthatEuropeinstalledin2021.Whilethesefourhavebeenplayingintheirownleagueforquitesometime,wecanobservemovementinthemarketshares,partlyduetonewcomersenteringtheR-BESSsegment.Firstofall,AustriaovertooktheUKonthethirdstepofthepodiumin2021.Second,theoverallshareofthetop4marketsdecreasedfrom90%in2020to84%in2021.ThisisattributedtotheemergenceofothercountriessuchasSweden,Spain,Poland,andagrowingR-BESSmarketinSwitzerland.TheexpandingresidentialPVmarketandthehighelectricitypricesresultingfromtheenergycrisisarejointlyboostingtheresidentialstoragemarketinthosecountries.Weexpectthetop4marketstoremainthesamein2022and2023aswell,withtheUKreclaimingthe#3position.Lookingfurtherto2026,theannualmarketwillgrowsignificantlyto7.3GWh(+220%from2021).GermanyandItalyareexpectedtoremainthelargestresidentialbatteryinstallers,butPolandandSwedenareexpectedtoreplaceAustriaandtheUKonpositions#3and#4respectively.Themarketshareofthefourleadingcountriesissupposedtodecreaseto64%by2026,reflectingthediversificationoftheresidentialstoragemarketinmoreandmoreEuropeancountries.Inthischapter,weprovidebackgroundontheevolutionofresidentialbatterystorageinEurope’sfourmostprominentmarketsin2021.EuropeanMarketOutlookForResidentialBatteryStorage2022–202622FIGURE4.1TOP4MARKETSIN2021&2026RestofEurope:359MWh,16%Austria:132MWh,6%UK:128MWh,5%Italy:321MWh,14%Germany:1,354MWh,59%2,294MWh2021RestofEurope:2,673MWh,37%Sweden:458MWh,6%Poland:587MWh,8%Italy:961MWh,13%Germany:2,651MWh,36%7,330MWh2026©SOLARPOWEREUROPE2022Thetop4Europeanresidentialbatterystoragemarkets4©SolarEdgeEuropeanMarketOutlookForResidentialBatteryStorage2022–202623GERMANYITALYUKAUSTRIA2022forecast(mediumscenario)annualmarketsize(MWh)1,538(+14%)1,111(+246%)288(+124%)223(+70%)2021annualmarketsize(MWh)1,354321128132CumulativeresidentialBESScapacity2021(MWh)3,430593401293CumulativeresidentialPVcapacity2021(MW)60,59922,12714,5992,760ResidentialBESS-PVattachmentrate2021(%)70%45%45%30%Retailelectricitypriceforresidentialcustomers2021(EUR/kWh)0.321350.230950.219840.22505OverarchingframeworkforprosumerelectricityexportFeed-intariff/feed-inpremiumNet-billingMarketbasedFeed-intariffAverageexporttariffforresidentialPVsystems2021(EUR/kWh)0.070.230.060.13Authorizationtoself-consumeYesYesYesYesEnergyarbitragepossibleYes,butuncommonNoYesNoAggregationandgridservicespossiblePartiallyPilotsongoingYesYesFinancialsupportschemesforBESSSporadically,someregionalsupportschemesSuperbonusupto110%depreciationifcombinedwithotherenergyefficiencymeasurements;50%taxdeductionforbuildingrenovation0%VATifinstalledalongsideaPVsystemFederalinvestmentgrantforsolarandbatterystorage;someregionalsupportmechanismsRemainingbarriersLowsmart-meterrollout;nodynamictime-of-usetariffs;regionalgrantswithlimitedfundsfreezingthemarketNet-billing;longpermittingtimesforPVinstallations;inconsistentregionalinterpretationofincentiveschemesLowincentivizationofbatterystoragesystems;incompletesmartmeterrolloutIncompletesmartmeterrollout;inconsistencyamongstreal-timedatasystemsusedbyDSOs;differentpermittingofPVinstallationsamongDSOsTABLE4.1.OVERVIEWOFTHETOP4RESIDENTIALBESSMARKETS4Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–2026244.1.GermanyIn2021,GermanywasagainEurope’slargestmarketforresidentialbatterystorage.Thecountryinstalled1,354MWhin2021,an81%increasefromthe749MWhaddedin2020.ThestrongleadershipofGermanycontinuedin2021ataverydominantlevel,capturinga59%shareoftheentireEuropeanR-BESSmarket.However,itsrelativesharedecreasedby9%percentagepointsfromthe68%inthepreviousyear.Weestimatethatnearly150,000singleresidentialstorageunitswereinstalledthroughout2021.ThisismorethanfourtimeshigherthanItaly,Europe’ssecondlargestR-BESSmarket.Thisimpressivedevelopmentevenslightlysurpassedourpreviousedition’sHighScenario,whichassumedthattheGermanmarketwouldreach1,240MWhin2021.Anestablishedsolarandbatterystoragemarketformanyyears,2021wastheyearelectricitypricesstarteditsrallyatthewholesalemarkets.WhileretailelectricitypricesinGermanyhavebeenalreadyamongthehighestinEuropeforyears,thefearoffurtherpricehikestriggeredmanymorehomeownerstolookintosolar&storagesystemtechnology,adevelopmentthathasacceleratedwiththestartoftheRussianwaragainstUkraine,whichresultedinskyrocketingenergyprices.Residentialsolar&storagemarketinGermanySincethebeginningofthemillennium,Germanyhasmost-oftenbeenthelargestsolarPVmarketinEurope.Germany’ssolarboombeganinApril2000,whenthefirstfeed-intariffschemeforsolarPVsystemswasimplementedthroughitsEEGlaw,andexperiencedafirststronggrowthphaseuntil2012,whenthesizeofthemarketwassimilarto2022.UndertheFITscheme,householdscouldsellallelectricitygeneratedbytheirsolarPVsystematveryhighratestothegridfor20years.Dramaticincentivecutsandregulatorychangesthatalsokick-startedatransitiontoself-consumptiondepresseddemandforseveralyearsbetween2013and2018,whensolarcostreductionshavemadeinvestmentsintothetechnologyattractiveagain.Overthelasttwodecadesthefeed-inratewascontinuouslyreducedfornewsystems,reachingaround0.43EUR/kWhattheendof2009,0.24EUR/kWhin2012,andabout0.07EUR/kWhendof2021.Thedecreasingpriceforsolarexporttariffs,combinedwithcostreductioninsolartechnology,generallywidenedthegulftoGermany’sveryhighretailpowertariffsovertime.Asself-consumptionbecameincreasinglyappealing,theneedforbatterystorageemerged.SincebatterieswereverycostlyFIGURE4.2GERMANYRESIDENTIALBESSANNUALSCENARIOS2022-202600.51.01.52.02.53.03.54.0GWhHistoricaldataLowScenarioHighScenarioMediumScenario202220232024202520262017201820192020202114%6%15%20%17%1.43.72.01.31.9©SOLARPOWEREUROPE2022EuropeanMarketOutlookForResidentialBatteryStorage2022–20262510yearsago,theGermangovernmentinitiatedasubsidyscheme.Thisscheme,createdin2013andapplicabletosolarinstallationsbelow30kW,wastheignitionpointforthecombinedrooftopsolarandstoragemarketinGermany.Thecountry’sdevelopmentbank(KfW)firstofferedlow-interestloansandgrantsbetween2013-2015,afterwhichtheschemewasrenewedforanotherthreeyears,from2016-2018,providingthebasisforseverallocalbatterysystemmanufacturingstart-ups,andtimeforinstallerstolearnaboutsolarandstorage.WhileseveralGermanstateshadofferedincentivesforbatterystorageinrecentyears,mostoftheseprogrammebudgetsarenowexhausted.ThereisstillaGermany-wideKfWloanprogrammeforsolar,storage,andotherrenewablesavailable(KfW270),butthediscountratesstartingat3.58%aresimilartocommercialloans.EconomicsforresidentialstorageinGermanyPremiumfeed-inratesquicklydecreasedbymorethan70%in2020and2021forresidentialsystems–downto0.0693EUR/kWhbyendof2021–asaresultofhighinstallationvolumesontheonehandandaverageelectricitypricesof0.3214EUR/kWhin2021ontheother.Thisprovidedanattractivebusinesscaseforsolar&storage,andexplainsthe81%annualR-BESSgrowthrate,despiteanincreaseinproductcostduetosupplychainissues.Thebusinesscaseremainssimilarin2022,onlythatretailelectricitypricesexceededthe0.40EUR/kWhlevelinthesecondhalfoftheyear,makingtheinvestmentinPVandstorageevenmoreattractive.For2022,ourestimateisa14%annualgrowthto1.5GWhintheMediumScenario,whichwouldbemuchhigherifmorebatteriesandinstallerswereavailable.AsofJuly30,2022,theEEG2023editionofthenewgovernmentcoalitionwentintoeffect,whichincreasedtheexcesssolarpowerfeed-infornewsystemsto0.086EUR/kWh,from0.0624EUR/kWhinJuly2022.Themonthlydecreasingtrajectoryoffeed-intariffsisnowfrozenuntil2024,afterwhichitwillre-startwithlevelsof1%,butonlyevery6months.Asthegovernmentislookingtoincreaseaccessiblepowervolumesduringthecurrentenergycrises,thetechnicallimittoinjectonly70%ofasolarsystem’sratedpoweroutputwasabolishedasofJanuary2023.Moreover,householdsdecidingtoexportallsolarelectricitytothegridwillbenefitfromabonusof0.048EUR/kWh,raisingtotalremunerationto0.134EUR/kWh.Thefullfeed-inisalsoaimedat©sonnen4Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202626investorswhosepropertieshavelittleornoself-consumptionneedsandencouragesmaximumusageofavailableroofspace.Inthecaseofresidentialsolar,homeownerswillverylikelyoptmostlyforsolar&storageandthelowerself-consumptiontariff,however,thelawallowstwoseparatesystemsonthesamehouse–oneoptimisedforself-consumption,theotherforfullfeed-in.ProspectsThefurtherprospectsfortheR-BESSmarketinGermanyareverybright.Thenew,higherfullfeed-inrateswillnotreverseorevenslowthetrendofnewresidentialPVsystemsbeingbuilttogetherwithabattery.Theenergycrisishasputenergysecurityonthetable,atopicGermanshavenotworriedaboutfordecades,anddrivensignificantpsychologicalshiftsinthewayconsumersperceivetheself-generationandconsumptionofenergy,andthewaysinwhichhouseholdscanseizethemeansofenergyproduction.TheR-BESSriseinGermanywillcontinueinthecomingyears,mostlyfollowingthedevelopmentoftheresidentialPVsector,whichwillcontinueitsgrowth–fromaround1.8GWin2022,toabout2.2GWin2024.Weestimatethatbatteryattachmentrateswillgrowcloseto90%by2026,makingthebatterybasicallyastandardpartofanewsolarsysteminGermany.However,duetosupplychainissues,heightenedbythehugedemandforbatteriesfromthecarindustry,noteveryonewhowantssolar&storagewillgetthefullpackageintheshortrun.Overall,weexpecttheannualmarkettoexpandin2022by14%to1.5GWhinourMediumScenario.Therearetworeasonsforthelowergrowththaninthepreviousyear–first,theinstallershortagelimitsgrowthintheresidentialPVmarket,andsecond,thereistheearliermentionedshortageofavailablebatteries.AsdemandforsolarinGermanyhasswelleddramaticallyduringtheenergycrises,ourHighScenarioanticipatesasmuchas2GWhin2022.Thestoryissimilarfor2023.Althoughthebottleneckonthesupplysideisanticipatedtocontinueandenergypricecapsfromthegovernmentpromisesomesecurityonincreasingenergyexpenses,themomentumtogetholdofcleanandsafepowersupplywillstay,especiallyasnobodyknowshowlongthisenergycriseswilllast.OurMediumScenarioforecasts1.8GWhfor2023,1.9GWhin2024,2.2GWhin2025,and2.7GWhin2026.However,ifGermanyfacedblackoutsinthewinter2022/23,andtheenergycrisesaggravated,therunonsolar&storagecouldevengetmuchlarger.OurHighScenarioanticipatesannualadditionsof2.3GWhin2023,andadvancingtowards3.7GWhin2026.Inanycase,Germanywillabsorbalotofbatterycapacityoverthenextfiveyears.From2022to2026,atotalof10.1GWhofresidentialstoragecapacitywillbeinstalledundertheMediumScenario,and13.5GWhundertheHighScenario.ThiswouldboostthecumulativeR-BESScapacityfromthe2021levelof3.4GWh,toaround13.5GWhintheMediumScenario,17.1GWhintheHighScenario,andeven11GWhintheLowScenario,bytheendof2026.4.2.ItalyUnliketheoverallsolarpowermarket,whereItalyhasseverelylaggedbehindtheleadingEuropeansolarnationsformanyyears,thestoryismuchdifferentforresidentialenergystorage.Since2018,theItalianR-BESSmarkethasbeenthesecondlargestinEurope,albeitfollowingbyalargemarginthecontinent’s#1Germany.Thefirstresidentialsolar&storageinstallationsinthecountrywereregisteredin2015.Sincethen,thesectorstartedtogrowrapidlyfollowingfinancialsupportschemesavailableintheregionsofLombardy,Veneto,andFriuliVeneziaGiulia,andtheextensiontobatteriesofthe50%taxcreditforthepurchasingofaresidentialPVsystem.TheintroductionoftheSuperbonus110%incentiveschemeconstitutedastrongimprovementinBESSattractivenessinthecountry.Thoughtheschemewasintroducedinmid-2020,theeffectsonR-BESSsalesareonlyfullyvisibleinthe240%year-on-yearmarketgrowththattookplacein2021,bringingannualinstallationsto321MWh.Thankstothisboost,Italyclearlyemergedasthesecondlargestmarketin2021,distancingitselffromAustriaandtheUnitedKingdom.Thecumulativeoperatingcapacityin2021stoodatjustbelow600MWh,growing118%fromthepreviousyear.EuropeanMarketOutlookForResidentialBatteryStorage2022–202627Residentialsolar&storagemarketinItalyTheresidentialPVsegmentremainsakeycontributortotheItaliansolarsector,withanaverageshareof33%amongtheannuallyinstalledPVcapacityinthelast5years.Thishasledtoacumulativecapacityof4.5GWandmorethan900,000homes.TheresidentialPVmarketinItalytookoffbetween2005and2013,followingthefiveContoEnergiadecrees,settingasubsidisedfeed-intariffforsmall-scalesolargeneration.Between600,000and700,000homeswereequippedduringthisperiod,andstillbenefitfromtheschemeastheFITincentivewasgrantedfor20yearsfromthecommissioningofthesystem.Residentialsolarinstallationswentdownafter2013,fluctuatingaround200MWinstalledperyearsincethen.TheItalianenergyauthorityGSEoffersanet-billingscheme(ScambiosulPosto)foranyPVsystembelow500kW.Underthisscheme,onayearlybasisprosumerssubtractthevalueofelectricityfedintothegridtothebillofelectricityconsumed.Thegovernmentalsoprovidesanincentivefortheinstallationofsmall-scalePVgenerationassetsintheformofa10-year-longtaxcreditcovering50%oftheinvestmentcost.Typically,ahouseholdspending10,000EURforaPVsystemwouldbenefitfroma500EURtaxrebateperyearduringthenext10years.TheresidentialBESSmarketinItalyemergedin2016,whentheLombardyintroducedanewincentivespecificallyforsmall-scalestorage.Thebudgetsetwas2millionEURfirstandwasthenrenewedeveryyearsince,eachtimeamountingto3–4millionEUR.In2018,the10-yeartaxincentivefortheinstallationofresidentialPVcovering50%oftheupfrontinvestmentcostwereextendedtosmall-scaleBESS.AllsystemsinstalledsimultaneouslyorafterthecommissioningofthePVsystemwereeligible.VenetoandFriuliVeneziaGiuliaalsolaunchedsimilarincentiveprogrammesinthefollowingyears,althoughthemajorityoftheseprogrammeshavebeendiscontinued.InJuly2020,aspartoftheCOVID-19nationalrecoveryplan,thegovernmentintroducedtheaforementionedSuperbonus110%,providingasignificantincentivetoenergyefficiencyinterventionsinresidentialbuildings.Themeasureoriginallygavethepossibilitytoobtainataxcreditof110%fortheexpensesincurredfromJuly2020until2023,tobespreadovera5-yearperiodinfiveannualinstalmentsofequalamount.Inordertoobtainthecredit,thelawmakesanimportantdifferentiationbetween“leading”(trainanti)”and“towed”(trainati)improvements.Theformerconcernathermalinsulation,winterairconditioningsystems,andseismicriskreductionworks;whilethelatterincludetheinstallationofgrid-connectedPVsystems,FIGURE4.3ITALYRESIDENTIALBESSANNUALSCENARIOS2022-202602004006008001,0001,2001,4001,6001,800MWhHistoricaldataLowScenarioHighScenarioMediumScenario2022202320242025201620172018201920202021246%10%1%0%6%3211,6531,556911432©SOLARPOWEREUROPE20224Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202628batterystorage,EVcharginginfrastructure,andotherenergyefficiencymeasures.Therefore,inordertobenefitfromtheSuperbonus,thePVandthestoragesystemsmustbeinstalledinconjunctionwithoneofthemaininterventionsandtheoverallinvestmentmademustleadtoanimprovementofthebuilding’senergyefficiencyrating.InthecaseofineligibilityfortheSuperbonus,itisstillpossibletoobtainthe10-year50%taxcreditalreadyinplacefortheinstallationofsmall-scalePVgenerationassetsandBESS.InNovember2022,thenewlyformedgovernmentannouncedthatstartingfromJanuary2023theSuperbonuswillbereducedto90%andwillprogressivelydecreaseinthefollowingyears.However,differentlyfromwhatpreviouslyplanned,accordingtothenewrulesitwillbestillpossibleforsinglehousestobenefitfromtheSuperbonusin2023.EconomicsforresidentialstorageinItalyTheonlyapplicationforresidentialBESSinItalyatpresentistoimprovetheself-consumptionrateofresidentialPVplants.Householdbatteriescannotchargefromnorfeedtothegridbutcanonlyinteractwiththeco-locatedsolarPVsystem,whichmakesitimpossibletousestorageforotherbusinessmodelssuchasenergyarbitrage.However,theUVAMs(MixedEnabledVirtualUnits)pilotprojectallowsaggregationofdistributedassetsfortheprovisionofservicessuchascongestionresolution,balancingandsecondaryandtertiaryreserves.Thecurrentframeworkforself-consumptionundertheScambiosulPostonet-billingschemealsoprovidesabarriertothestoragebusinesscase,sinceprosumersgetaremunerationfortheelectricitytheyfeedintothegrid.Thisschemeissupposedlypoisedtoendin2024,althoughthisneedstobeconfirmedinanewlegislativedecree.Beforetheimpactoftheenergypricecrisismaterialiseditselfin2022,theItalianannualaverageoftheretailelectricityratehasoscillatedbetween0.20and0.25EUR/kWh(towardstheendof2021).Italywasoneofthepioneersintherolloutofsmartmeters,butitdidnottranslateintomanyinnovativeelectricityoffersforresidentialcustomers.Statictime-of-usepricingcontracts,withalowerrateatnightandduringoff-peakperiodsarewidelyavailableandoftenchosenbyPVowners.However,dynamictime-of-usetariffsareinexistentyet.ThemaindriversforthepurchaseofBESSbyhomeownersequippedwithPVremaintheverygenerousincentivescurrentlyoffered.Thankstothose,ItalyisbyfarthemostattractiveEuropeancountryforsmall-scalesolar&storagesystemsregardingpaybacktime.The110%or50%taxreliefsdrasticallyeasestheinvestmentinaresidentialBESS,andtheadditionalindependenceitprovidestogetherwithaPVappealsmanycustomers.Thehighelectricitypricesexperiencedin2021and2022havefurtherimprovedthehomestoragebusinesscase.ProspectsWiththeSuperbonus110%infullswingandimpactedbyvolatileelectricityprices,theItalianresidentialBESSmarkethasbeenskyrocketingin2022.IntheperiodfromJanuarytoSeptember2022,about100,000units,equivalentto859MWh,werereportedlyinstalled.WeexpectthatbyyearendthecapacitywillexceedtheGWhmarkandreach1.1GWh.Thisexpected246%growthmightnotbesufficienttosurpassGermanyaslargestEuropeanmarketin2022,butwillcertainlyplacetheItalianmarketinthesameorderofmagnitude.Theabilityofthemarkettoadapttothecurrentshortageofinstallersanditsabilitytoattractenoughbatterieswillplayamajorroleindetermininghowmanynewsolarandstoragesystemswillbeinstalled.Atpresent,thelackofinstallersresultsindelaysof6monthsofmoreforR-BESSorders.However,astheItalianR-BESSboommightbegoodforanothersurprise,ourHighScenarioestimatesinstallationstoadd1.56GWhin2022,whichisthesamelevelastheMidScenarioforGermany.Inthecomingyears,theevolutionofthemarketbecomesmoreuncertain.While2023ispoisedtomarkanotherexceptionalyear,whenthemarketcouldevenexceedthe2022performance,theprogressivephaseoutoftheSuperbonuscoupledwiththeexpectedterminationoftheScambiosulPostonet-billingschememakeroomformuchuncertaintyregardingthedirectionofthemarketinthesubsequentyears.Asubstantialdecreaseintheattractivenessofthesupportingframeworkcouldintheoryleadthemarkettopre-Superbonuslevels;however,weexpectthemarkettoatleaststabilisejustbelowtheGWhrange.AccordingtotheItalianTSOTerna,16GWhofresidentialstorageshouldbedeployedby2030,comparedtothe5.6GWhthatwouldbeoperatingby2026inourMediumScenario.EuropeanMarketOutlookForResidentialBatteryStorage2022–2026294.3.AustriaTheresidentialbatterystoragemarketinAustriastartedtogetfirsttractionasearlyas2015,butstartedtogrowfasterafterinvestmentgrantswerelaunchedin2018atthefederallevel.Lastyear,132MWhfrom13,000unitsofresidentialstoragecapacitywereadded,correspondingtoa223%increasecomparedto2020.Thisenormousgrowthwasenabledprimarilybygovernmentincentives,mainlyforPVsystemsincombinationwithstorage.ThebatterystoragerolloutdifferswidelyamongAustria’sstates,anddependsalsoonlocalincentiveschemes.Therenewalofthefederalinvestmentgrantforstorageinmid-2022hasprovidedanotherpushforbatterystoragebothfornewsystemsandretrofitsofPVsystems.OurMediumScenarioforecastsresidentialstoragecapacityadditionsof223MWhin2022,correspondingtoastrongannualgrowthrateof70%.Weexpectsustainedtwo-digitgrowth,thoughatmuchlowerlevel,fortheremainingyearstakenintoaccount.Residentialsolar&storagemarketinAustriaTheAustrianfederalgovernmentsetanewregulatoryframeworkforrenewableenergyin2012byadoptingtheÖkostromnovelle(GreenElectricityAct).Thisincludedageneroussubsidyforsmall-scalePVsystems,offeringaone-timefinancialgrantforinstallationsbelow5kWanda13-yearFITforsystemsbetween5–200kW.Thesupportschemewasinstrumentalforkick-startingtheresidentialsolarPVmarket,whichaddedaround50MWinthismarketsegmentintheperiodfrom2013to2017.In2017,thegovernmentpassedanation-wideinvestmentsubsidyforsmall-scalePVsystems(locatedonrooftopsandsealedareas)fortheyears2018and2019incoherencewithitsrenewablestargets.Thescheme,backedbyanannual9millionEURbudget,offeredfinancialsupportcoveringupto30%oftheinvestmentcosts.Concurrently,abudgetof6millionEURperyearwasdedicatedtosupportinvestmentsinanystoragesystemsinstalledwiththesubsidisedPVsystems.Overall,thefinancialsupportforsolar&storagesystemscouldcoverupto45%ofthetotalinvestmentcosts.Inadditiontothefederalsupportscheme,therehavebeenalsoregionalincentivesavailableforbothsmall-scalesolarPVandattachedstoragesystems.In2020,alargerrebateschemeforsolarandenergystoragesystemswaslaunched.Withabudgetofaround36millionEUR,abouttwo-thirdwasearmarkedforsolarandtheotherthirdtostorage.The©Tesla4Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202630widesuccessofthescheme,whichofferedhomeowners250EUR/kWofsolarand200EUR/kWhofbatterystorage,hasledtoareactivationin2022,andabudgetincreaseto240millionEUR.Whileapproximately4,500R-BESSinstallationsandatotalcapacityof30MWhwereregisteredinAustriain2018,thesectorexperiencedsteadygrowthinthecomingyears.In2019,5,500unitsand37MWhwereinstalled;in2020,demandgrew11%toabout41MWhspreadover6,000systems,beforethemarketwasunleashedin2021,whengrowthexplodedtoalevelof222%,resultingin132MWhover13,000units.EconomicsofresidentialelectricitystorageinAustriaTheresidentialBESSsectorinAustriaismainlydrivenbyhomeowners’desiretoimprovetheirenergyself-sufficiency.Theretailelectricityrateforhouseholdcustomerswasratherstableduringthelastdecade,oscillatingaround0.20EUR/kWhbutincreasedto0.30EUR/kWhbytheendof2021.UnlikeinGermany,nearlyalltraditionalAustrianretailersinthecountryalreadyofferstatictime-of-usetariffswithspecificratesforpeakandoff-peaktimes,afurtherreasontoaddR-BESStoasolarsystem.Furthermore,againunlikeinGermany,thenationalsmartmeterrolloutisprogressingandreached47%bytheendof2021,adevelopmentthatenablesmoreretailerstoprovidedynamicpricingcontracts,withspecialtariffstructuresforhouseholdsequippedwithsolar&storagesystems.ProspectsWhileresidentialelectricitypricesfurtherincreasedin2022,quicklyapproachingthe0.40EUR/kWhlevel,thegovernmentpassedanelectricitycapexactlyatthatlevelinSeptember.ItremainstobeseenwhatimpactthatwillhaveontheR-BESSmarket,butAustria’sambitioussolargoalsandconsumerslookingforenergysecuritymakesfurtherstronggrowthverylikely.ThefederalgovernmentofAustriastrivestosupply100%oftotalnationalelectricityconsumptionwithrenewableenergysourcesby2030,andsolarpowerplaysamajorrole.Thecountryislookingtoinstallsolaron1millionrooftops,a10-foldincreasefromthe100,000rooftopPVsystemstargetthatwasFIGURE4.4AUSTRIARESIDENTIALBESSANNUALSCENARIOS2022-20260100200300400500600700MWhHistoricaldataLowScenarioHighScenarioMediumScenario202220232024202520262017201820192020202170%23%13%11%26%132608288145282©SOLARPOWEREUROPE2022EuropeanMarketOutlookForResidentialBatteryStorage2022–202631introducedin2018.TheRenewableExpansionAct(EAG),passedinJuly2021,targetsadditionsof27TWhofelectricityfromrenewableenergies,fromwhichabigpart,11TWh,shouldcomefromsolarPV.Toachievethis,in2021,amarketpremiumforthefeed-intariffsschemewasintroduced.Inadditiontothis,themarketissupportedthroughasolarandstoragegrantprogram,whichhasseenasteepbudgetincreaseto240millionEURin2022.Withthesmartmeterrolloutplannedforcompletionby2024,enablingmoreinnovativeelectricitysupplycontracts,andthepopularinvestmentschemesundertheEAG,theinstalledbatterystoragemarketisanticipatedtogrowto223MWhin2022,accordingtoourMediumScenario.Thiswouldbeayear-on-yearmarginalgrowthof92MWhor70%.Astheinstabilityinenergysupplymarketscontinues,sowillconsumersincreasinglyturntosolar&storage.TheMediumScenarioforecastsannualmarketgrowthratesof11-26%inthecomingfouryears,andtoalmostdoubleto430MWhin2026,comparedto2022.However,theHighScenarioestimatesover40%moregrowthwith608MWhby2026.4.4.UnitedKingdomAlthoughtheUKmarketdroppedonespottorank4intheEuropeanarena,asitwasovertakenbyAustria,thecountry’sperformanceintheR-BESSsegmentwasbetterthanpreviouslyforecasted.Lastyear,weassumedthemarketwouldreach93MWhinaMediumScenarioand112MWhinaHighScenario.in2021,butinfact,themarketovershootourpredictions,adding55,000homestorageunittotalling128MWh,whichwas16MWhaboveourmostambitiousscenario.Thismeanta57%growthin2021fromthe81MWhinstalledtheyearbefore.Asaresult,theUnitedKingdomoperatedatotalR-BESSfleetofslightlyover400MWhbytheendof2021.TheUKresidentialstoragemarkethasasolidbasedespitetheabsenceofanysupportschemeuntilveryrecently.Thestoragebusinesscaseimprovedin2021duetorisingelectricityprices,asinmanyotherEuropeancountries.In2022,weexpectthecountrytopursueitsgrowthtrajectoryandtosurpassallpreviousrecords.SupportedbyagrowingresidentialPVmarket,thecountrywilladd288MWhofresidentialbatterycapacityaccordingtoourMediumScenario,a124%increasefromthepreviousyear.©Tesla4Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202632Residentialsolar&storagemarketintheUKInthelastdecade,thesmall-scalesolarPVsegmentintheUKwassupportedbyagenerousexporttariff.FromApril2010,householdswhodecidedtoinstallasolarPVsystemontheirroofcouldberemuneratedforeverykWhgenerated.Ontopofthat,anextra-paymentwasgrantedforeverykWhexported.Thosesubsidieswerecontractedforadurationof20yearsfromthedateofcommissioning.Thankstothisscheme,theresidentialsolarPVmarketsawasteadygrowthsince2010.Theannualadditionalcapacityfromthesegmentstoodover150MWeveryyearwithapeakat560MWin2015.In2017and2018,thegovernmentreducedtheexportrateremunerationfornewresidentialPVcapacity,resultinginadecreaseofthemarketsegmenttolevelsbelow100MW.Despitethefallinnewresidentialsolarinstallationsinthesetwoyears,themarketwasontheriseagainin2019.Anadditionalresidentialsolarcapacityof125MWwascommissioned,accountingforapproximately45,000households–butthatwasduetotheinstallationrushinthefirstthreemonthsoftheyearbeforetheFITschemewasclosed.SinceJanuary2020,theSmartExportGuarantee(SEG)requireselectricitysupplierstopaysmall-scalePVownersforthelow-carbonelectricitytheyexporttothegrid.ThisappliesforsolarPVsystemsupto5MW.ElectricitysuppliersdecidetherateanddurationunderwhichtheyremuneratethePVowners.ThisschemeisalsoavailablewhenthePVsystemisequippedwithabattery.Thebatterycanberechargedfromthegrid,butwhenthatelectricityisexported,itisnotremunerated.Asaresultofthisnewframework,andduetotherisinggapbetweentheelectricityretailpriceandtheexportrate,thedemandforR-BESShasincreasedsignificantly.Itisestimatedthat,in2021,45%ofnewresidentialPVsystemsinstalledcametogetherwithabattery.EconomicsofresidentialelectricitystorageintheUKThemaindriverforresidentialstorageintheUKistheelectricityprice.ComparedtomainlandEurope,thepriceforhouseholdelectricityusedtobelow,buthasrisenrapidlyinrecenttimes.From0.14EUR/kWhinearly2010and0.19EUR/kWhin2015,itreachedaround0.22EUR/kWhin2021.Theeconomicrecoveryfollowingthepandemic-inducedrestrictionshasdriventheglobaldemandforgasupwards,leadingtohigherelectricitypricesandcreatingimprovedeconomicconditionsforstorageashouseholdslookedforwaystoincreasetheirenergy©SolaredgeEuropeanMarketOutlookForResidentialBatteryStorage2022–202633independence.Thetaxesonelectricityforhouseholdsarerelativelylow,whiletheelectricitybillsprovideclearpricesignalstoencourageconsumerstooptimisetheirelectricityconsumption.Thesmartmeterrolloutwillalsogiveaboosttothedeploymentofbatteries,butthistrendisexperiencingsomedelays.Theoriginalplanwastohaveabout80%ofhouseholdsequippedwithsmartmetersin2020.Currently,theresponsibilitytoadvancesmartmeterrolloutisontheshouldersofenergysuppliers,whowererequiredtotakestepstoassurethatalltheirdomesticandsmallbusinesscustomershavebeenequippedwithsmartmetersbytheendof2021.Fortheremainingcustomers,gasandelectricitysuppliershavebindingannualrollouttargetstoreacheveryyearbetweenJanuary2022andtheendof2025.TheUKretailelectricitymarketisatanadvancedstageofliberalisation,withsuppliersbeingfreetodesigntheirowntariffstructures,bothforimportandexportrates.Thisalreadyallowsstorageassetownerstomakebigsavingsbysmartlymanagingtheirenergyuse.Theeffortsshouldnowfocusonthesmartmeterrollout,inordertomaketime-of-usetariffsaccessibletoallhouseholds.Withliberalisedexporttariffs,theeconomicsofresidentialsolarandstoragearedifficulttoevaluateatthenationallevelandratherdependontheindividualretailer.Asof2022,15suppliersarelicensedtoofferSmartExportGuaranteecontracts.Mostofthetariffsrangefrom0.035to0.064EUR/kWh.Sincetheseareconsiderablylowerthantheretailelectricityprice,thereisavaluablemargintoincreaseself-consumptionasmuchaspossiblewitharesidentialbattery.Anotherpositivedevelopmentthattookplacein2022wastheintroduction,startingfrom1April2022until31March2027,oftaxreliefmeasuresforenergyefficiencyandrenewableenergyattheresidentiallevel.Underthismeasures,solarPVandothertechnologiesinstalledinresidentialpropertiesaregranteda0%VATacrossGreatBritain.Thisisalsoapplicableforbatteries,aslongastheyareinstalledtogetherwithsolarPV.Inaddition,valuecouldbetappedfromenergyarbitrage.Homebatteriesenableprosumerstomanagesmartlytheirenergyuseandproduction,storingelectricityfromthegridwhenitischeapandexportingitbackatatimewheretheexportrateishigher.SomeSEGcontractsarespecificallydesignedFIGURE4.5UKRESIDENTIALBESSANNUALSCENARIOS2022-20260100200300400500600700MWhHistoricaldataLowScenarioHighScenarioMediumScenario2022202320242025202620172018201920202021124%-10%10%16%-1%128655348158199©SOLARPOWEREUROPE2022forconsumersequippedwithbothsolarPVandstorage,optimisingthehouseloadtothebenefitsofthesupplierandtheend-consumer.ThenewSEGregulationprovidesretailerswiththeoptiontooffertime-of-usepricingcontractstotheircustomers,whichinturncanimprovetheeconomicsofsolar&storageinstallations.ProspectsProspectsfortheR-BESSmarketintheUKhaveconsiderablyimprovedfromlastyear.TheenergypricecrisisandthewarinUkrainehaveledtoasharpincreaseinthedemandforresidentialsolarPV.Alongwithit,thedemandforresidentialstoragesolutionshasgrownaswell.Withnospecificgovernmentincentiveforstorage,andthelikelytransitionperiodstillneededfornewSEGofferstoreachtheirfullmaturity,thesehighelectricitypricesandtheincreasedresidentialPVdemandarethekeydriversforthedevelopmentofstorage.AnadditionaldriverofthemarketcouldberepresentedbyachangeinresidentialbuildingsregulationinEnglandandWales,wherenewhomeswillberequiredtoincludearooftopPVsysteminordertoachieveabetterlevelofenergyefficiency.This,inturn,couldleadtoahighernumberofhouseholdsinterestedinthepurchasingofaBESSthatcanmaximisethebenefitsofatime-of-usetariff.Inaddition,thenewnation-widehalf-hourlymeteringplanforthedomesticretailmarketexpectedtobecompletedwithin4-5yearswillensureabetterpenetrationofnewtime-of-usetariffsandproductsthatwillrewardend-consumersforusingenergyinamoreflexibleway.Thiswillimprovetheoveralleconomicsofsolar&storage,makingthecombinationmoreattractiveforprosumers.WeareexpectingtoseeastableannualresidentialPVmarketofover300MWforallyearsunderthescopeofourforecast–asignificantincreasefromaround150MWin2021.This,andanattachmentrateforbatterywithnewPVintherangeof45%,isjustifyingthestronguptakethatthemarketwillexperiencein2022.OurMediumScenarioforesees288MWhin2022,up124%from2021.Withoutanysignificantincentivesgivinganextraboosttothemarket,itisexpectedthatannualinstallationswillstabilisearoundthe300MWhlevelandeventuallyreach326MWhin2026.Themarketisdrivenonlybymarketconditionsandhighenergyprices,whichmightnotremainatthecurrentlevelsafter2023andcouldultimatelyslowthedevelopmentpacein2024andbeyond.ImprovedpolicyandmarketconditionsarehoweverreflectedinourHighScenario,underwhichthevastpotentialofhomestorageinthecountryistapped.Accordingtothisscenario,theUKannualmarketreaches655MWhby2026,whichisequaltofivetimesthe2021marketsize.TheHighScenarioalsoassumesareliefonthesupplyshortageforbatteriesthatthemarketiscurrentlyexperiencing.Bycontrast,ourLowScenarioonlyforeseesastagnatingmarketfortheyearstocome.Asannualinstallationswerealreadyover100MWhwithoutanyspecificsupport,wearenotexpectingtoseeanydropsinthemarket.Itwouldratherremainstable,withaslightpushin2022and2023resultingfromthehighpriceofelectricity.Lookingatthetotaloperatingcapacityforecasts,by2026theUKwillreachahomestoragefleetof1.8GWhintheMediumScenario,comparedto1.3GWhintheLowScenarioand2.8GWhintheHighScenario.4Thetop4Europeanresidentialbatterystoragemarkets/continuedEuropeanMarketOutlookForResidentialBatteryStorage2022–202634EuropeanMarketOutlookForResidentialBatteryStorage2022–202635SolarPowerEurope-LeadingtheEnergyTransitionRond-PointRobertSchuman3,1040Brussels,BelgiumT+3227095520/F+3227253250info@solarpowereurope.org/www.solarpowereurope.orgISBNNUMBER9789464669008
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