1. Home storage products: towards all-in-one machine and higher charging capacity
1.1 Product: supporting demand for stock and incremental household PV market
Household energy storage is usually used in combination with household photovoltaic, and the installed capacity is experiencing rapid growth. The core of the household energy storage system, also known as battery energy storage system, is a rechargeable energy storage battery, which is usually based on lithium ion or lead-acid batteries, controlled by a computer, and realizes charging and discharging cycles under the coordination of other intelligent hardware and software. The home energy storage system can usually be combined with distributed photovoltaic power generation to form a home optical storage system. From the user side, the home optical storage system can eliminate the negative impact of power failure on normal life while reducing the electricity bill; From the grid side, the household energy storage equipment supporting unified dispatching can alleviate the power shortage during peak hours and provide frequency correction for the grid.
According to the different coupling modes of photovoltaic and energy storage systems, they are divided into DC coupling systems and AC coupling systems, which are respectively suitable for the incremental market of newly installed photovoltaic systems and the stock market of installed photovoltaic systems. Greater space for incremental market is the main driving force for future market growth:
(1) Incremental market (photovoltaic+energy storage system newly installed in target households): generally, DC coupled products are used. The DC coupled energy storage system includes a battery system and a hybrid inverter. The hybrid inverter has the functions of both photovoltaic grid connected inverter and energy storage converter. The advantage of DC coupling is that both photovoltaic and energy storage batteries are converted through hybrid inverters, and no additional photovoltaic grid connected inverter is required. The system integration is higher, installation and after-sales service are more convenient, and intelligent monitoring and control are also convenient. Some families that have installed PV systems choose to remove the original PV grid connected inverter and install a new hybrid inverter.
(2) In the stock market (the target households have installed photovoltaic and newly added energy storage systems), AC coupling products are generally used. Only batteries and energy storage converters need to be installed, which will not affect the original photovoltaic system. In principle, the design of the energy storage system is not directly related to the photovoltaic system, which can be determined according to the needs. The advantage of AC coupling lies in high safety: in the AC coupling mode, the energy is gathered at the AC terminal, which can not only be directly provided to the load or sent to the power grid, but also can be directly charged to the battery through the bidirectional converter. Low voltage PV and low-voltage batteries can be selected to eliminate the DC high-voltage risk in the energy storage system.
According to whether the system is connected to the power grid, the household energy storage system can be divided into grid connected system and off grid system. The core difference lies in whether the system is connected to the power grid. At present, most regions use the parallel off grid integrated system. (1) Grid connected systems, photovoltaic and energy storage systems can be connected to the grid, and power can be purchased from the grid when photovoltaic or battery power is insufficient. It is suitable for areas with stable power system and relatively low electricity price. (2) Off grid system is suitable for desert, island and other areas without power grid or areas where the power grid is unstable and needs self use. The off grid energy storage converter is usually equipped with a diesel generator interface to supplement power when the battery power supply is insufficient at night. (3) The parallel and off grid integrated machine has the parallel and off grid switching function or integrates the parallel and off grid modes into one machine, which can complete the switching into the off grid mode in case of power failure. It is suitable for areas with unstable power systems and frequent power outages.
The core hardware equipment of the household energy storage system includes batteries and converters. According to the degree of product integration, there are mainly two modes: integrated machine and split machine. The current market is dominated by split machine, but the integrated machine is the development trend of the high-end market: (1) split machine, some AC coupling products and DC coupling products adopt the split machine mode, and the battery system and inverter system are provided by pack manufacturers and inverter manufacturers respectively, Then it reaches the end users through the channels of integrators, dealers and installers. (2) All in one machine, the product is an all in one machine system including battery and inverter, usually an AC coupling product. The upstream battery system and inverter, as suppliers, usually adopt the OEM mode. The final product does not show the supplier’s brand, and the product sales and after-sales are all undertaken by the brand.
According to the voltage of the battery pack, it can be divided into high-voltage batteries and low-voltage batteries. The industry has shown a trend of switching to high-voltage batteries. The main purpose is to improve efficiency and simplify system design, but at the same time, it requires higher cell consistency and BMS management capabilities. High voltage batteries usually have a battery pack voltage of more than 48V, which can be achieved by connecting multiple cells in series. In terms of efficiency, with the same capacity of batteries, the battery current of the high-voltage energy storage system is small, and the interference to the system is small. The efficiency of the high-voltage energy storage system is higher; In terms of system design, the circuit topology of the high-voltage hybrid inverter is simpler, smaller, lighter and more reliable. However, the high-voltage battery is composed of multiple cells in series and parallel. The higher the voltage, the more batteries in series, and the higher the requirement on the consistency of the cells. At the same time, it needs to cooperate with the efficient BMS management system, otherwise it is easy to have failures.
There are three types of enterprises in the industrial chain: 1) Integrators, which only make brands and purchase all equipment. Generally, the power cells and inverters are purchased and integrated products are sold under their own brands, with perfect sales channels and strong brand power, such as Tesla, Sonnen, etc. 2) Inverter manufacturers can sell inverters separately or purchase integrated cell batteries/all-in-one machines. Thanks to their brand and channel accumulation in the photovoltaic inverter industry, inverter manufacturers can quickly spread. The core of the energy storage system is the control of the inverter on the battery, that is, the communication between the inverter and the battery. The inverter manufacturer has a deep understanding of power electronics technology and has more advantages. 3) There are two modes of participation for cell manufacturers. One is to supply cells to downstream brands without participating in product integration and brand exposure, such as Penghui Energy, Ningde Times, Yiwei Lithium Energy, etc. Cell manufacturers have diversified business fields and rich application scenarios. On the one hand, they can benefit from the rapid growth of the home storage industry, and on the other hand, they can create synergies with other businesses; The other mode is to produce battery systems and sell them separately or purchase inverter modules at the same time to complete hardware integration and software design, such as BYD and Paineng Technology. The business models of the participants in the industrial chain show two trends: (1) The inverter and the cell manufacturers are integrated downward to conduct product integration, which can strengthen the control of sales channels and improve profitability;
(2) Some manufacturers focus on equipment supply and can open up more customers and wider application scenarios to win by volume.
1.2 Value: the investment cost of the whole system is nearly 80000 yuan
Take a 4.68kw photovoltaic+5.8kw/6kw Votai energy storage system in the UK as an example, the total investment is about 10000 pounds, equivalent to a unit price of 17.61/w. Among them, the PV system accounts for 32%, the module is 3.08 yuan/w, and the PV inverter is 2.56 yuan/w. The energy storage system accounts for 35%, and the unit price is 4.97 yuan/wh. Other materials+installation cost 3400 pounds, accounting for 33%.
1.3 Trend: High capacity battery+hybrid inverter+all-in-one machine
From the perspective of battery trend, energy storage batteries are evolving towards higher capacity. With the increase of residential power consumption, the electric capacity of each household is gradually increased, and some products realize system expansion through modularization. Because of the penetration of new energy vehicles, the increase in the power of household appliances and the impact of home and office work, the power consumption of each household is increased, and the electrification of energy storage demand is increased. (1) In terms of the regional market, the electricity consumption per household has gradually increased. Taking the German market as an example, the average electrification will be 8.8 kwh in 2021, 8.5 kwh in 2020 and 8 kwh in 2019. The increase of electrification in the German market is mainly due to the development of new energy vehicles and the increase of household electricity consumption. (2) Modular battery, convenient for expansion. Since the charging capacity and power of a single product are limited, the manufacturer will set that the product can be flexibly configured through modular combination to meet the needs of different capacity scenarios. (3) The battery moves from low voltage to high voltage. The higher voltage battery system can reduce heat generation, improve system efficiency, simplify circuit structure and facilitate system installation. With the improvement of cell manufacturing technology and battery management system control technology, high-voltage battery system has become the industry trend.
From the perspective of inverter trend, the demand for hybrid inverters suitable for incremental markets and off grid inverters without access to the power grid has increased. (1) The newly added photovoltaic power distribution and storage are sufficient, and the demand for hybrid inverters is increasing. At present, the household energy storage system is dominated by the incremental market (new distributed photovoltaic users supporting energy storage), so the demand for hybrid inverters increases. The stock market has its own photovoltaic grid connected inverter, so when installing the energy storage system incrementally, the energy storage inverter is selected, while the incremental market generally combines the photovoltaic inverter and the energy storage converter into a hybrid inverter. Users are more inclined to install energy storage when new PV is installed. The main reason is that the uncertainty of net measurement policy of overseas household PV becomes stronger, the uncertainty of household PV revenue increases, and users have the power to configure energy storage to achieve spontaneous self use, reducing the uncertainty of revenue. (2) The demand for off grid inverters is driven by markets such as the United States and South Africa. The United States has frequent natural disasters, high power outage risk, and the U.S. power grid is relatively fragile and aging. In order to stabilize the grid, some photovoltaic system power companies do not allow them to access the grid. Therefore, it needs to be installed off the grid and used spontaneously to replace the generator. With the rapid growth of the American market, the demand for off grid energy storage converters matching the American market has increased significantly. Deloitte integrates the design of grid connection and off grid mode in the same machine. With its outstanding cost control ability, its products are popular in the American market.
From the perspective of the trend of terminal products, currently, it is mainly split type, that is, the battery and inverter system are used together, and then gradually develop to the all-in-one machine. Previously, battery manufacturers usually provided battery systems, and inverter manufacturers provided hybrid inverters. In channel sales, they matched the batteries and inverters according to their adaptability. The products of different brands are cumbersome for installation and after-sales. Therefore, pack manufacturers and inverter manufacturers have started to involve each other. At present, some inverter manufacturers (such as Sungrow Power, Huawei, Goodwin, etc.) have purchased electric cells to assemble their own packs and integrated batteries and inverters for sales. On the one hand, it can expand the market, on the other hand, it can help consumers save one-time equipment investment, simplify installation, save installation costs, and facilitate after-sales maintenance. The all-in-one machine products of battery manufacturers such as Pinen are under development. The overall price of all-in-one terminal is high, but the all-in-one terminal is highly integrated, which reduces the difficulty of installation and saves installation costs. The hardware cost in overseas market only accounts for less than half of the overall cost, and the subsequent labor cost includes installation, service, design, subsequent grid connection application, subsidy application, etc., accounting for the main proportion. The all-in-one machine can save subsequent costs, so it is gradually recognized in the high-end market.
From the perspective of regional market trend, the difference of power grid structure and power market results in slight difference of mainstream products in different regions. The European grid connection mode is the main mode, the United States has many grid connection and off grid modes, and Australia is exploring the virtual power plant mode.
(1) There are many grid connection modes in Europe. The PV market in Europe has a high penetration rate, and the power grid is relatively stable. The use of grid connected systems can meet the demand. The energy storage system needs to interact with the power grid, so the product inverter should be grid connected certified to meet the local power grid requirements. In grid connection application, the customer can switch the mode. In normal power generation mode, the photovoltaic meets the electrical needs during the day, and then charges the battery. At night, it automatically switches to the DC output of the battery end, and the inverter is switched to 220V to supply power to the load at home; In rainy days, when photovoltaic power generation is insufficient, send instructions to the grid to purchase power from the grid to meet the household load and charge the battery at the same time.
(2) There are many parallel and offline models in the US market. The laying of power grids in the United States was concentrated in the last century, and the power grid facilities were relatively old, laying hidden dangers for the power grid transportation capacity and load capacity. The problems of aging equipment and outdated technology were prominent. According to the statistics of the US Department of Energy, 70% of transmission lines and power transformers have more than 25 years of service life, and 60% of circuit breakers have more than 30 years of service life. According to IEA statistics, American users experienced an average of 3.2 hours of interruption during major events and 1.5 hours of interruption without major events, totaling nearly 5 hours. For regions with frequent bad weather, the average annual power outage can be more than 10 hours. The parallel off grid all-in-one machine can realize fast parallel off grid mode switching. When the power is cut off, the battery is used as the power supply. When the battery power is insufficient, the battery can only be fully charged the next day. Therefore, the parallel off grid machine needs to match the interface of diesel engine, photovoltaic or wind power.
(3) Australia is exploring the virtual power plant model. Multiple households with photovoltaic energy storage system can accept VPP protocol and power grid dispatching. Households can sell excess electricity; When there is a demand for electricity, purchase electricity through this setting, and then connect to the power grid. For residential solar energy systems, household and commercial energy storage systems, V2G electric vehicles and other distributed energy sources, AEMO has developed new technical standards and launched a virtual power plant scheme. Distributed energy can meet the needs of users while participating in the power market to obtain benefits.
- Market space: distributed photovoltaic beyond expectation+energy storage penetration “double” β”， It is estimated that 58GWh of new installed capacity will be added in 2025
Household energy storage is usually used in combination with household photovoltaic, and the installed capacity is experiencing rapid growth. In 2015, the annual new installed capacity of global household energy storage was only about 200MW. Since 2017, the global installed capacity has increased significantly. The annual new installed capacity has increased significantly. By 2020, the global new installed capacity will reach 1.2GW, with a year-on-year growth of 30%. Europe and the United States are the markets with the greatest growth potential in the world. In terms of shipments, according to IHS Markit statistics, the global new household energy storage shipments in 2020 will be 4.44 GWh, a year-on-year increase of 44.2%, of which Europe, the United States, Japan and Australia are in the forefront, accounting for 3/4 of the global shipments. In the European market, the German market has developed most rapidly, with the German shipment volume exceeding 1.1GWh, ranking first in the world. The American shipment volume also exceeded 1GWh, ranking second. Japan’s shipment volume in 2020 was nearly 800MWh, far exceeding other countries, ranking third.
2.1 Demand driven: energy transformation is imminent, and distributed photovoltaic is much more than expected
The excessive dependence on foreign energy has brought about energy crisis, and the Russian Ukrainian war has intensified the conflict. In the European energy structure, natural gas accounts for a high proportion, about 25%. According to the BP World Energy Statistical Yearbook, fossil energy accounts for a high proportion in Europe’s energy consumption structure, with natural gas accounting for about 25%. European natural gas is highly dependent on foreign countries, mainly relying on imports. Of the natural gas sources, 80% come from imported pipelines and liquefied natural gas, including 13 billion cubic feet/day of pipeline gas imported from Russia, accounting for 29% of the total supply. Excessive dependence on foreign energy seriously affects energy security. The government hopes to reduce dependence and maintain national security. Russia’s stopping the supply of natural gas to Europe will threaten the energy supply in Europe. It is urgent to develop clean energy to ensure energy supply.
The policy side accelerated the energy transformation and raised the expectation of photovoltaic installation. In order to ensure energy security, countries have introduced policies to accelerate the pace of energy transformation. Germany has advanced the target of 100% renewable energy power generation from 2050 to 2035. The “Easter Package” aims to achieve 80% renewable energy power generation, 600TWh solar power generation and 215GW photovoltaic installation by 2030. The European Commission adopted the REPowerEU proposal to raise the renewable energy target of the EU by 2030, which may be raised to 45% again. Several measures are taken to support distributed photovoltaic: 1) The European photovoltaic roof plan is expected to increase 17 twh of electricity in the first year after implementation (17% higher than previously predicted), and generate 42 twh of additional electricity by 25 years; 2) By 25 years, all appropriate public buildings will be installed with PV; 3) All new buildings are required to install photovoltaic roofs, and the approval process is controlled within three months.
From the perspective of household PV penetration rate, the installed capacity of major overseas PV demand countries starts from distributed mode. For example, in the early stage of PV development in Japan, Australia and the United States, the new installed capacity is mainly residential roofs. At the same time, due to the early start, the PV penetration rate in Europe and Australia is much higher than that in China. The installed capacity of household PV in Australia, the United States, Germany and Japan accounts for 66.5%, 25.3%, 34.4% and 29.5% of the total PV installed capacity, respectively, The proportion of household installed capacity in developed countries is more than 10 times that in China. The proportion of overseas distributed PV is higher. We think there are two reasons:
(1) The urbanization process in Europe is relatively high. Independent or semi independent housing is mainly used, which is suitable for the development of household photovoltaic. According to the data in 2016, there are 135.6 million houses in the United States, of which 95 million are villas or townhouses, accounting for about 66%; According to the Japanese Housing Land Statistics Survey 2013, the number of independent houses in Japan accounted for 54.9% in 2013, accounting for the main share of the total number of houses. From the perspective of the number of residential buildings, the proportion of five floors and below is 84.9%. In Tokyo, the proportion of independent houses in 2013 is still as high as 40.7%; The average proportion of independent and semi independent houses in Europe is also as high as 57.4%, and the proportion of independent and semi independent houses in Britain even exceeds 80%. Compared with this, the types of housing in China are very different, high-rise housing occupies a dominant position, and independent and semi independent housing are mainly concentrated in rural areas and urban suburbs.
(2) The policy supports the spontaneous use of household PV. European PV power generation adopts a net measurement policy. Consumers with renewable energy power generation facilities can deduct part of their electricity bills according to the electricity delivered to the grid, and only calculate the net consumption. This policy greatly improves the economy of distributed PV spontaneous self use surplus electricity online. Countries have high subsidies for distributed PV, relatively low bank loan interest rates, low financing costs of PV systems, and no arrears in subsidies, which stimulate the willingness to install.
2.2 Demand driven: electricity price+subsidy promote energy storage penetration
At present, the permeability of domestic reservoir is low, and there is huge room for improvement. 1) America: According to the statistics of Berkeley Laboratory, at present, only 6% of household energy storage and photovoltaic are used together in the American market. The highest proportion of optical storage co construction is nearly 80% in Hawaii, followed by 8% in California, and only about 4% in other regions. 2) Germany: According to the statistics of ISEA RWTH Aachen, by 2021, Germany has installed 430000 households of household energy storage. According to the calculation of 40 million roofs in Germany, the penetration rate of energy storage on all roofs is only 1.1% at present. From the perspective of new installed capacity, in 2021, Germany will add 145000 energy storage households, 93% of which will be new photovoltaic energy distribution and storage, 7% of which will be stock photovoltaic transformation, and 215000 new photovoltaic households, The proportion of energy storage and new photovoltaic construction together reached 63%. With the increasing demand for energy security and power stability, the implementation of policy subsidies, the increase of residential electricity prices, and the decline of energy storage system costs, the tendency to install energy storage systems will become stronger, and there is room for significant improvement in the penetration rate of energy storage systems.
Short term: The rise of electricity price has an impact on the improvement of energy storage economy and has become a catalyst for market growth, but the impact is limited and not a decisive factor. Assume that the annual household electricity consumption is 4000 kwh, the evening electricity consumption is 60%, the 5kw photovoltaic+10kwh energy storage system is installed, the annual photovoltaic power generation hours are 1000 hours, the photovoltaic investment cost is 1.3 euros/w (equivalent to 9.1 yuan/w), the energy storage investment cost is 0.8 euros/wh (equivalent to 5.6 yuan/wh), and the residential electricity price is 0.3464 euros/kw. The initial investment is 14500 euros (equivalent to 101500 yuan), including 6500 euros (equivalent to 45500 yuan) for photovoltaic system and 8000 euros (equivalent to 56000 yuan) for energy storage system. According to the statistics of the Federal Bureau of Statistics, the average annual income of German households is 56000 euros, and the cost of installing the optical storage system accounts for 25% of the annual household income. Compared with the whole life cycle (20 years) of power grid purchase, the installation of optical storage saves 16601 euros and 9338 euros respectively. The ROI of optical storage system installation is 8.25%, and the payback period is 11 years. The electricity price is increased by 50%, and the payback period of investment is shortened to 8 years.
Medium term: the substitution of new energy is a deterministic trend, and a large number of new energy are connected to the grid, causing grid pressure. In order to promote the installation of energy storage, the higher the certainty and continuity of medium-term policy subsidies. From the perspective of power grid stability, the power grid pressure caused by large quantities of new energy grid connection is due to the fact that the government guides power generation/users to configure energy storage through subsidies and other policies. The underlying logic of European countries’ subsidies for distributed photovoltaic+energy storage is to reduce the power grid distribution pressure through distributed systems. The UK will be exempted from value-added tax on household photovoltaic systems from April 2022, Italy will increase the tax exemption on household storage equipment to 110% from 2020, and Poland, Sweden and other countries will set up budget subsidies for household optical storage systems.
Long term: with the development of scale and technology, the system cost will be reduced for a long time. According to the statistics of Solar Power Europe, from 2015 to 2019, the cost of small photovoltaic systems will decrease by about 18%, and the cost of household energy storage systems will decrease by nearly 40%. It is estimated that by 2023, the cost of household photovoltaic systems will further decrease by 10%, while the cost of household energy storage systems will significantly decrease by 33%. In the short term, due to the fluctuation of supply and demand, the system cost fluctuates slightly, but the long-term trend of technology cost reduction is determined. In 2021, the LCOE of the household optical storage system will be 10.1 euro cents/kWh, and that of the photovoltaic system will be 14.7 euro cents/kWh. In the same year, the household electricity price in Germany will reach 31.9 euro cents/kWh, and the electricity cost of the optical storage system will be about 1/3 of the electricity price. Therefore, the installation of the optical storage system has a good economy, and with the increase of the electricity price and the decrease of the cost, the economy will be further improved in the future.
2.3 Regional market: dominated by the United States, Europe and Australia
2.3.1 United States: Subsidies drive market demand
Policy is the biggest driving force for the development of the US after balance sheet market. According to Wood Mackenzie’s statistics, in 2021, 409.5MW/902.7MWh of new household energy storage capacity will be installed in the United States. (1) At the federal level, in March 2018, the United States released the “New Rules for Tax Credit of Residential Energy Storage System”. For residential optical storage system, if users install the battery energy storage system one year after the installation of the photovoltaic system, and meet the condition that 100% of the stored energy comes from photovoltaic power generation, this set of energy storage equipment can also obtain a 26% tax credit. (2) At the state government level, California launched the SGIP plan to subsidize household power generation. In November 2021, the House of Representatives passed the Better Construction Act of the United States, extending ITC policy subsidies to 2033, and granting up to 30% of the incentive credit or 6% of the basic credit before 2026. The credit will be reduced gradually in 2032 and 2033 by the end of 2031. For household energy storage projects, the subsidy standard for energy storage systems with a scale of 10 kW or less is $0.5/Wh. For energy storage systems larger than 10kW, the subsidy standard can be $0.5/Wh, and the investment tax exemption (ITC) can not be obtained at the same time. If you want to obtain ITC at the same time, the subsidy standard of SGIP will be reduced to $0.36/Wh.
2.3.2 Europe: electricity price rises and economy improves
Europe is the world’s largest household energy storage market. According to BNEF statistics, Europe will add 1.2GW/1.9GWh of new energy storage capacity in 2020, including 639MW/1179MWh of new household energy storage capacity, a year-on-year increase of 90%, accounting for 52% of the new market. By 2020, Europe’s household energy storage capacity will have accumulated 1.6GW, ranking first in the world. According to the statistics of Solar Power Europe, the growth of household electrochemical energy storage in Europe will be strong in 2020, with about 140000 systems installed. Among them, Germany, Italy, the United Kingdom, Austria and Switzerland have increased by more than 90% of the European household market, and Germany alone has accounted for more than two-thirds of the market.
Germany continues to occupy the largest household energy storage market in Europe, and Italy, Austria and the United Kingdom continue to grow rapidly. In the next few years, Germany will continue to maintain its leading position in the European household energy storage market. According to the EUPD survey, 58% of German household photovoltaic users will consider adding energy storage equipment after the expiration of the FIT (Feed in Tariff) contract. Italy will follow closely and maintain its position as the second largest market. With the strong support of the government, Austria will surpass the UK to become the third largest market: Austria has extended subsidies for household photovoltaic and energy storage from 2020 to 2023, with a total budget of 24 million euros, including 12 million euros dedicated to household energy storage. In addition, with the support of national policies, the parliaments of Switzerland, Spain, Ireland, the Czech Republic and Sweden have become new growth points in Europe.
The rise in electricity prices has improved the economy of household energy storage, and demand has grown rapidly. The conflict between Russia and Ukraine has further exacerbated the rise in commodity prices, which has greatly increased the power generation costs of gas and coal-fired power plants, which account for about 40% of Germany’s electricity production, leading to an increase in wholesale electricity prices. In the past 12 months, the contracted electricity prices of German residents have increased by 48%. The rising cost of electricity will stimulate the demand for household energy storage.
2.3.3 Australia: Virtual Power Plant Expands Profits to Improve Economy
Australia has good soil for developing household energy storage, and there is still huge room for growth in the future. Australia is a sparsely populated country, and power mainly depends on long-distance transmission. Therefore, distributed energy has been greatly developed. Microgrid, energy storage and other technologies can improve the reliability of power consumption, reduce the load fluctuation of the power grid, and accelerate the promotion of Australia’s home battery system. It is increasingly important for the sustainable promotion of solar energy and decarbonization of the power grid, and also help to improve the long-term energy affordability and reliability. According to BNEF statistics, Australia will add 48MW/134MWh of household energy storage capacity in 2020. Australia has good conditions for the development of household energy storage, but it currently accounts for only 5% of the global market, and has huge development space in the future.
We believe that the reasons for the development of household photovoltaic energy storage in Australia are as follows: 1) The level of light resources is the first in the world, and the light intensity in more than 80% of the regions exceeds 2000 kW/m2/h. The cost of photovoltaic power generation in Australia under the same system cost is only half of the cost of power generation in Germany. 2) Policy support: The Australian government, through the Small scale Renewable Energy Scheme (SRES), issues Small scale Technology Certificates (STCs) to users who install household PV, and high energy consumption users are also required to purchase a certain proportion of STCs to fulfill their obligations under RET; At the same time, Australian state governments give FiT subsidies to household PV;
3) The housing ownership rate and single family housing rate are high. The premise of installing the household photovoltaic system is to have an independent roof, so the apartments that live in a centralized way generally do not have the conditions to install the household photovoltaic storage system. According to the census data of statistical institutions in various regions, the proportion of total households living in independent/semi independent houses in EU/USA/Japan/Australia exceeds 50%. The housing structure dominated by independent houses is the premise for large-scale development of household light storage systems in these regions. 4) Electricity prices in Australia are rising. From the perspective of wholesale electricity price, as solar power generation enters the power market in a large area, the electricity price during the daytime photovoltaic power generation period drops, and the electricity price reaches the peak at night. Therefore, the assistance of energy storage is urgently needed to realize the time shift of electricity.
Australia is gradually establishing a virtual power plant mechanism to improve the profitability of energy storage. In 2018, the Liberal Party government of South Australia allocated AUD180 million for 40000 households to install small electrochemical energy storage and large electrochemical energy storage power plants, including virtual power plants. In 2019, the Australian Renewable Energy Agency (ARENA) has committed to conduct a $2.46 million virtual power plant (VPP) integration test for the Australian Energy Market Operator (AEMO), aiming to demonstrate the VPP’s ability to provide energy and frequency control services. Household energy storage participates in the ancillary service market through aggregators. According to the report released by the Australian Energy Market Operator (AEMO), users can obtain nearly A $3000 from virtual power plants, with a payback period of 6.8 years.
2.4 Spatial prediction: It is estimated that 58.26GWh of new installed capacity of global household energy storage will be added in 2025
According to the number of households, the distributed photovoltaic installed capacity is calculated. Considering the penetration rate of household energy storage, the number of installed household energy storage is obtained. Assuming that the average installed capacity of each household can obtain the installed capacity of household energy storage globally and in each market. We estimate that, assuming that the energy storage penetration rate of the newly installed photovoltaic market in 2025 will be 15%, the energy storage penetration rate of the stock market will be 2%, the global household energy storage capacity will reach 25.45GW/58.26GWh, and the combined growth rate of installed energy from 2021-2025 will be 58%.
- Industrial barriers: barriers formed by products and channels
Barrier 1: Channel
On the one hand, the household energy storage market is mainly concentrated in the United States, Europe and other countries and regions with high popularity of household photovoltaic and high household electricity charges. If Chinese products want to enter the relevant markets, they usually need to arrange overseas distribution channels. On the other hand, household energy storage products are usually used in conjunction with photovoltaic systems, and have certain attributes of consumer appliances, which can quickly reach downstream customers through a reasonable channel layout. There are two main channels in the American market: one is to focus on the stock market through distribution channels. The products are sold to PV installers through distributors, and then sold to households that have installed household PV. The other channel is to focus on new markets through builders. Builders will purchase products uniformly when building new houses.
Barrier 2: Product strength
There are various types of household energy storage products with a wide range of electrification. According to the charging capacity, voltage level, coupling mode, etc. of household energy storage products, they can be divided into several categories: small battery system, low-voltage modular battery system, high-voltage modular battery system, AC coupling battery system, off grid battery system, and all-in-one solar cell system. The charging capacity of products varies from 5-500kwh, and users can choose appropriate products according to household power demand.
R&D investment and service capability guarantee the company’s products and brands. The core of energy storage system is safety, long life and low cost. The higher the charge of the energy storage system, the more complex the system and the greater the difficulty of integration. Therefore, companies with high R&D investment, strong technical reserves and efficient, convenient, rich and reliable product delivery capabilities in the market will have more competitive advantages. In addition, the company needs to provide a certain period of warranty for its products, usually 10 years. Good product quality performance, low repair rate, and high safety evaluation are important factors that affect consumers’ choice and constitute industry brand barriers.