Recently, a branch of new energy energy storage - home energy storage, has suddenly become a hit in the global market. At the same time, under the influence of the sharp rise in global energy prices, the home energy storage market is showing a trend of explosion in Europe and the United States, especially the European home energy storage is leading the world.
Why does it suddently become a hit? Technology, Cost and Needs!
Considering from the supply side, technological changes have greatly improved the convenience and practicality of products.
With the upgrading and progress of lithium battery technology and the continuous reduction of cost under large-scale commercial application, these have provided conditions for the portable energy storage products to become a hit. It is understood that the large-scale production of energy storage batteries is inseparable from the substantial increase in energy density brought by breakthroughs in lithium battery technology. Taking Tesla as an example, the first electric car Roadster launched in 2008 has energy density of only about 55Wh/kg, but the 2021 Model 3 launched in 2020 has energy density of more than 300Wh/kg.
At the same time, with the large-scale commercial application of lithium batteries and the increase in research and development investment, although the price of lithium ore remains high, the average unit cost of lithium battery packs is still showing a continuous downward trend. According to data from Bloomberg New Energy Finance (BNEF), the average unit cost of lithium battery packs has dropped from US$684/kWh in 2013 to US$132/kWh in 2021, a drop of 80.70%. The cost reduction has also further promoted the market sales of home energy storage products.
The underlying reason for the popularity of household energy storage is mainly from the demand side
On the one hand, electricity prices in Europe have risen significantly, and the conflict between Russia and Ukraine has exacerbated the energy crisis in Europe. European energy prices have exceeded 200 Euros/MWh, and European natural gas prices have increased by more than 8 times since 2020.
The low cost of photovoltaic storage allows European and American consumers to recover their investment costs within 3-5 years. Since 2021, household energy storage has shown explosive growth in the European and American markets with an annual growth rate of doubling.
In recent years, household energy storage has grown rapidly in Europe. According to statistics, more than 90% of household energy storage in Europe is concentrated in the top five countries—Germany, Italy, the United Kingdom, Austria, and Switzerland. Among them, Germany is the largest domestic energy storage market in Europe.
On the other hand, the demand for home energy storage in the United States is also rising rapidly, and giants such as Tesla have further improved the economics of home energy storage. Relevant data show that the total new installed capacity will reach 63.4GW/202.5GWh from 2021 to 2026, of which household use can reach 4.9GW/14.3GWh.
Recently, Tesla has partnered with California public utility company PG&E to create a new virtual power plant (VPP), providing eligible Powerwall users with remuneration incentive of $2 per kWh. It is reported that 50,000 Powerwall users will be eligible for the subsidy.
According to the market power demand situation and the number of Powerwall users, no matter where they are, they can have an income of 10-60 US dollars for each power dispatch. The economics of home energy storage will also be further highlighted in the US market.