SMM News: Europe is now the world's largest market for household energy storage, according to the latest research by Wood Mackenzie, a research firm. Over the next five years, the European residential energy storage market will grow faster than Germany, which has so far been the leader in the European residential energy storage market.
The cumulative deployment of residential energy storage capacity in Europe is expected to increase fivefold and reach 6.6GWh by 2024. By 2024, the annual deployment in the region will more than double and 500MW/1.2GWh will be deployed each year.
European countries other than Germany have begun to widely deploy residential energy storage systems, especially in the context of declining market structures, current electricity prices and feed-in electricity prices, which create good deployment prospects.
Although the economy of energy storage systems has been challenging in the past, the market has reached a turning point. The main markets in Germany, Italy and Spain are moving towards the power grid parity of residential solar energy + energy storage, at a time when the power cost of the grid is the same as that of the solar energy + energy storage system.
European energy storage suppliers by department
Wood Mackenzie's research model is measured by net present value (NPV) (NPV) and internal rate of return (IRR), with Germany and Italy at the top of the European market. Although these two countries have deployed more residential energy storage systems than other European countries, Wood Mackenzie expects this trend to expand in other European countries and will become a reasonable investment decision.
While NPV (NPV) indicators are not important to market growth, the strong growth so far in Germany and Italy, which have contributed to large-scale adoption of residential energy storage systems and market growth, have demonstrated this.
Mergers and acquisitions in the European residential energy storage market are also heating up. Utilities, oil and gas giants, energy storage companies and household users are exploring mergers and acquisitions for residential energy storage. These investments are usually further controlled equity investments or full acquisitions.
The cost of energy storage system continues to decline
The rapid reduction of the cost of energy storage system is the main driver of this economic turning point. With the advent of the era of electrification, the upgrading of infrastructure and policies aimed at addressing high capital expenditure power systems will lead to higher electricity prices.
With the continuous reduction in the cost of energy storage systems, Wood Mac expects economic conditions and market growth to continue to improve.
However, it is still a long way off for Britain and France to reach this economic turning point. Both countries are hampered by the cost of energy storage systems (per kilowatt-hour) and unfavourable or undeveloped energy storage frameworks, which will not achieve grid parity until 2024, but are expected to increase deployment anyway.
The development of Spain is a cause for concern
Spain is a noteworthy European market for residential energy storage. However, Spain has not yet developed a specific residential energy storage policy, which has implemented destructive solar power policies in the past (retroactive feed-in electricity tariffs and controversial "solar taxes").
However, driven by the European Commission, the Spanish government has been able to change its thinking, which means that it will soon see the development of the country's residential solar energy market, paving the way for the development of solar + energy storage projects in Spain, the most sunny region in Europe.
The report shows that there is still a lot of room for growth in the deployment of energy storage systems for residential solar power facilities, which accounted for 93 per cent of WoodMac's 2019 German solar + energy storage project. This makes the customer's advice more challenging.
The report points out that Europe needs more innovative business models to absorb upfront costs and enable residential energy storage systems to help European consumers transform their energy.
The rise in electricity prices and consumers' desire to live in a greener, more sustainable environment are enough to drive the deployment of residential energy storage systems.
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