With multiple factors superimposed, overseas household energy storage has become an incremental investment market

In recent years, the international situation has become increasingly complex, several events occur and black swans ushered in the energy crisis, ahead of the new champions league outbreak, the largest since the financial crisis in 2008 the global economic recession. With the increase in the frequency of extreme climate environments, 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, while the overseas household energy storage market has undoubtedly been pushed to the top of the current new energy investment pyramid, which is worthy of attention and interpretation.

With multiple factors superimposed, overseas household energy storage has become an incremental investment market.Since 2020, influenced by the international situation and geopolitics, crude oil prices have continued to rise. Since this year, crude oil prices have soared to close to the all-time high before the bursting of the financial bubble in 2008. Once again, the issue of energy security has been seriously put before the world. The insecurity brought by conflicts to energy stability has led countries to rethink energy disruption. What kind of energy structure do we need? How can the existing energy mix be transformed to achieve certainty in an uncertain world?

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

With the dual trend of policy and profitability, overseas deposits have become the new investment vane since the second half of 2021, and a large number of enterprises have poured into the European and North American markets. The growth rate of market demand is obviously higher than the supply, the price of household storage is rising, and the shortage of IGBT makes many enterprises out of supply. The high-end market is highly dependent on brands, and many residents prefer to wait for the brand they want to go on the market, rather than choose unfamiliar brands.

1. Accelerating energy transformation at the policy end and increasing installed PV capacity in all countries

The European Commission passed the REPowerEU bill on May 18, which raised the renewable energy target from 40% to 45% in 2030. At the same time, the photovoltaic installed target was raised again. By 2025, the cumulative photovoltaic installed scale of the EU will exceed 320GW, which will double the installed capacity by the end of 2021. The cumulative installed capacity is about 600GW by the end of 2030, more than double the current installed capacity. The document also calls for phasing in mandatory photovoltaic installations on new residential and commercial buildings. The US Department of Energy projects that photovoltaic capacity needs to rise from 76GW in 2020 to 1600GW in 2035 and to 3000GW by 2050.

2. Geopolitical conflicts lead to rising electricity prices, accelerating the introduction of subsidy policies and increasing the penetration rate of household energy storage

At present, the penetration rate of household storage is still very low. In Germany, for example, according to the statistics of ISEA RWTH Aachen, by 2021, about 430,000 households of household storage have been installed in Germany. Based on the calculation of 40 million roofs in Germany, the penetration rate of household storage is only 1.1%.

With energy security and stability requirements, policy subsidies ground, residents for electricity market factors such as cost reduction and energy storage system, residents' willingness to install energy storage system will be more intense, there will be a boost space energy storage system permeability.

Table 1.  European Household Energy Storage Policy (Part)

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

According to the forecast of Huajing Industrial Research Institute, the global average demand for household energy storage will grow by more than 60%, and the newly installed capacity will reach 48GWh in 2025. A complete set of household energy storage system includes battery system, inverter and enterprise parts. The average hardware cost of household energy storage in 2021 is about 2.8 yuan /wh. According to the forecast of 5% average cost reduction of energy storage system, the scale of household energy storage industry is expected to be about 111.7 billion yuan in 2025.

Figure 1 Forecast of newly installed capacity of global household energy storage(unit: GWh)

Figure 2 Capacity forecast of global Household energy storage market (unit: RMB 100 million)

We'll do a more aggressive forecast, assuming that the future market penetration rate reached 50%, under the condition of this hypothesis, American households store market space in the 862 GWH, 1209 GWH European market space, 28 GWH Australian market space, this will be an extremely large and attractive market segment.

Table 2 Calculation of household storage market space under 50% market penetration