China Energy Storage News: In recent years, the international situation has become increasingly complex, geopolitical conflicts have arisen one after another, the "Russia Ukraine conflict" Black Swan event has opened the prelude to the energy crisis in advance, and the COVID-19 has brought the largest global economic depression since the 2008 financial crisis. With the increasing frequency of extreme climate environment, countries have raised the discussion on environment and energy to the national strategic level, and policies to encourage the development of new energy have been introduced in turn. The overseas household energy storage market has undoubtedly been pushed to the top of the current new energy investment pyramid, which deserves special attention and interpretation.

1、 Overlapping multiple factors, overseas household energy storage has become an incremental investment market

Since 2020, influenced by the international situation and geopolitics, the price of crude oil has continued to rise. Since this year, the price of crude oil has once soared to the historical high point before the bursting of the 2008 financial foam. The issue of energy security has once again been seriously put before the world. The insecurity brought by conflicts to energy stability has led countries to rethink the energy crisis. What kind of energy structure system do we need to lay out? How can the existing energy structure be transformed to achieve certainty in an uncertain world pattern?

Among many energy technology routes, the cost advantage of photovoltaic power generation technology is obvious. Since 2020, the cost of photovoltaic power generation has been lower than that of traditional coal power generation. With the large-scale expansion of photovoltaic and continuous improvement of technology, the cost advantage of photovoltaic power generation will certainly make it a potential segment of the fastest growing track in the global carbon neutral development period.

With the dual trend of policy and profitability, from the second half of 2021, overseas household savings will become a new investment vane, and a large number of enterprises will enter the European and North American markets. The growth rate of market demand is obviously higher than that of supply, the price of household savings is rising, and the shortage of IGBT has caused many enterprises to be out of supply. The high-end market has a high dependence on brands. Many residents prefer to wait for the desired brand to go public, rather than choose unfamiliar brands.

1. Policy side accelerated energy transformation, and countries increased PV installed capacity

The European Commission passed the REPowerEU proposal on May 18. The target of renewable energy in 2030 has been raised from 40% to 45%. At the same time, the target of photovoltaic installation has been raised again. The EU's cumulative photovoltaic installed capacity in 2025 will exceed 320GW, doubling compared with that at the end of 2021. The target of cumulative installed capacity in 2030 will be about 600GW, more than twice the current installed capacity. In addition, the document also proposes to gradually force the installation of photovoltaic on new residential and industrial and commercial buildings. The US Department of Energy plans to increase photovoltaic power generation from 76GW in 2020 to 1600GW in 2035, and to reach 3000GW in 2050.

2. Geopolitical conflicts have prompted the rise of electricity prices, accelerated the introduction of subsidy policies, and increased the penetration rate of household energy storage

At present, the penetration rate of household energy storage is still very low. Taking Germany as an example, according to the statistics of ISEA RWTH Aachen, by 2021, Germany has installed about 430000 households of household energy storage, and the penetration rate of household energy storage is only 1.1% based on 40 million roofs in Germany.

With the increasing demand for energy security and power stability, the implementation of policy subsidies, the marketization of residential electricity prices and the reduction of energy storage system costs, residents will be more willing to install energy storage systems, and the penetration rate of energy storage systems will have much room to increase.

3. Measurement of household energy storage space in major countries around the world

According to the prediction of China Economic Industry Research Institute, the average growth rate of global household energy storage demand exceeds 60%, and the new installed capacity demand will reach 48GWh in 2025. A complete set of household energy storage system includes battery system, inverter and enterprise parts. In 2021, the average hardware cost of household energy storage will be about 2.8 yuan/wh. According to the prediction of 5% average cost reduction of the energy storage system, the scale of household energy storage industry is expected to be about 111.7 billion yuan in 2025.

Let's make a more radical prediction. Assuming that the market penetration rate will reach 50% in the future, under this assumption, the US household reserve market space will be 862GWh, the European market space will be 1209GWh, and the Australian market space will be 28GWh, which will be an extremely huge and attractive market segment.

Table 2 Estimation of household storage market space under the scenario of 50% market penetration

2、 Analysis of main market development

（1） Europe:

Major suppliers in the European market include component manufacturers, inverter manufacturers and battery manufacturers. At present, the marketing is carried out through the original channel vendors/dealers. From the current competition pattern, inverter manufacturers have more say in the market. In order to enhance their influence on the terminal market, some inverter manufacturers are promoting all-in-one machines. The whole market is mainly promoted by dealers, who will provide quality assurance services and training to installers. However, installers are generally not limited to cooperating with only one supplier. At present, in Europe, the supplier's brand premium exists, but the brand barrier has not been fully established. For Chinese enterprises, it is now a window period.

German household storage accounts for about 70% of the European market, and the German power system is mature. In the process of energy transformation, the security and stability of the power grid and the reliability of power supply have not been negatively affected. However, due to the conflict between Russia and Ukraine, the price of electricity for residents is high, and the main market is the household storage system within 30 kwh.

The main new energy in the UK is offshore wind power. The main market for energy storage is in the pre balance sheet market. The post balance sheet market has a relatively small installed capacity due to low electricity prices, high household storage VAT and weak subsidy policies. The roof capacity of the UK is not large, and the household storage system is generally within 10kwh, so the market is highly dependent on the brand.

Italy's power generation structure is dominated by natural gas. Solar energy and wind power have developed rapidly this year. However, due to the lack of natural gas, Italy is more dependent on energy imports, and its power generation capacity cannot meet the demand, so the cost of electricity for residents is high. Italy is introducing incentive policies for household savings, with great market potential.

The rapid growth of electricity price in Austria has driven the rapid growth of household storage market. It is expected that, according to the current installation speed, Austria is expected to surpass the UK and Italy to become the third largest household storage market in Europe in 2025.

（2） USA:

According to the U.S. energy storage monitor released by Wood Mackenzie, the installed capacity of energy storage in the United States will reach 3.51GW/10.5GWh in 2021, quadrupling year-on-year. User side energy storage in the United States is divided into residential and non residential, and non residential includes industrial and commercial energy storage and other scenarios.