June 14, 2024

Residential Battery Market Is Driven By Need For Backup Power Solutions

The residential battery market involves energy storage systems installed in residential spaces to store energy from solar photovoltaic systems or the electric grid. These batteries help store excess energy produced during the day which can power appliances and devices even when the sun is not shining. They provide backup power during outages and allow homeowners to reduce their dependence on the main power grid. The adoption of residential batteries is growing due to factors such as increasing installations of rooftop solar panels and a desire for energy independence and security. These batteries mainly include lithium-ion batteries due to their high energy density and lifespan. They enable time-shifting of energy use from daytime to evening or night and provide power for essential appliances and devices during power outages. The global residential battery market is estimated to be valued at US$ 17.96 Bn in 2024 and is expected to exhibit a CAGR of 9.7% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
One of the major trends in the residential battery market is the increasing adoption of integrated battery and solar solutions. Leading battery manufacturers are now offering integrated battery and solar energy systems that help simplify the installation process and reduce costs for homeowners. For example, Tesla’s Powerwall battery can be easily paired with its solar panels to effectively store energy generated from the solar system. Similarly, LG Chem and Panasonic offer bundled solar and battery solutions through partnerships with residential solar installers. Another key trend is the growing preference for cleaner and more sustainable chemistries in residential batteries. Lithium ferro phosphate or LFP is gaining popularity due to its improved thermal stability compared to NMC (nickel-manganese-cobalt) based lithium-ion chemistries. Companies are also investing in developing alternative chemistries like sodium ion batteries that rely on more abundant and affordable materials. This is expected to make energy storage more affordable and accessible for residential consumers in the coming years.

Porter’s Analysis
Threat of new entrants: The residential battery market is mature and capital intensive market which makes it difficult for new companies to enter. However, declining battery costs are enabling new companies to enter with innovative business models.

Bargaining power of buyers: Individual homeowners have low bargaining power due to the specialized nature of batteries. However, larger companies and housing cooperatives have higher bargaining power to negotiate on price and delivery terms.

Bargaining power of suppliers: The market has few global battery suppliers with specialized technology and production capabilities. This gives them substantial bargaining power over battery manufacturers.

Threat of new substitutes: Factors such as declining solar panel and battery costs are increasing adoption of solar plus storage systems over traditional grid connections. This poses a potential threat from substitutes.

Competitive rivalry: The market has multiple global and regional players. Intense competition exists in areas of technology, product performance, pricing and delivery. Players differentiate based on innovative business models and integrated energy solutions.

Key Takeaways
The global residential battery market size is expected to witness high growth over the forecast period driven by supportive regulatory policies for renewable energy adoption. Residential battery systems allow homeowners to store solar power and reduce dependence on utility companies.

Regional analysis:

North America currently dominates the global residential battery market owing to favorable net metering policies and high solar panel penetration in states like California and Hawaii. Asia Pacific is expected to showcase fastest growth due to initiatives in developing economies to provide access to electricity. China, Japan and Australia are major markets in the region.

Key players:

Key players operating in the residential battery market are Svenska Cellulosa Aktiebolaget SCA, BTG Biomass Technology Group, Eni S.p.A., Fulcrum BioEnergy, SOCOTEC Group, Drax Biomass Inc., Aggregated Micro Power Holdings plc, PVM Environmental Products, VGrid Energy Systems, and Vattenfall AB. Players are investing in advancing battery technologies and integrating battery solutions within home energy management systems to gain competitive advantage.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it