Space analysis of pv battery system market-the penetration will be greatly improved

Household energy storage is usually used in combination with household photovoltaic, and the installed capacity of pv battery system 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, and the annual new installed capacity has increased significantly. By 2020, the global new installed capacity reached 1.2GW, with a year-on-year growth of 30%, of which Europe and the United States are the most promising markets in the world. This article will mainly analyze the market space of pv battery system.

The demand for pv battery system drives the unexpected development of distributed photovoltaic

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%. In Europe’s energy consumption structure, fossil energy accounts for a high proportion, of which natural gas accounts 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. 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.

In order to ensure energy security, many countries have introduced policies to accelerate the pace of energy transformation. Germany will advance the target of 100% renewable energy power generation from 2050 to 2035, achieve the target of 600TWh solar power generation, and achieve 215GW photovoltaic installation by 2030.

The European Commission has adopted the REPowerEU proposal to raise the EU’s renewable energy target by 2030, which may be raised to 45% again. Furthermore, several measures support distributed photovoltaic:

● The European photovoltaic roof plan is expected to add 17 twh of power in the first year after implementation (17% higher than the previous forecast), and generate 42 twh of additional power in the next 25 years;

● By 25 years, all appropriate public buildings will be installed with PV;

● All new buildings are required to install photovoltaic roofs, and the approval process is controlled within three months.

Reasons for the higher proportion of global distributed pv battery system

From the perspective of household PV penetration rate, the national installed capacity required by major global pv battery system is started from distributed photovoltaic.

For example, in the initial 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 far higher than that in China. 

The installed capacity of household pv battery system 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 installed capacity of household pv battery system in developed countries accounts for more than 10 times that in China. The proportion of global distributed pv battery system is higher for two reasons.

The urbanization process in Europe is relatively high

The urbanization process in Europe is relatively high, and the housing is mainly independent or semi independent, which is suitable for the development of household pv battery system.

Data in 2016 showed that there were 135.6 million housing units in the United States, of which 95 million were villas or townhouses, accounting for about 66%; 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%.

In contrast, the types of housing in China are very different, with high-rise housing occupying a dominant position, and independent and semi independent housing mainly concentrated in rural areas and urban suburbs.

Policies support the spontaneous use of household pv battery system

The net metering policy is implemented for photovoltaic power generation in Europe. Consumers with renewable energy power generation facilities can deduct a 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 the distributed pv battery system’s self generated and self used surplus power grid connection. Countries have high subsidies for distributed pv battery system, and the bank loan interest rate is relatively low. The financing cost of photovoltaic cell systems is low. There is no problem of default in subsidies, which has inspired the willingness to install.

Electricity price and subsidy promote the increase of energy storage permeability

Amarica

According to statistics, at present, only 6% of household energy storage and photovoltaic cell systems in the U.S. market are used together. 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.

Germany

According to statistics, by 2021, 430000 households of energy storage have been installed in Germany. According to the calculation of 40 million roofs in Germany, the penetration rate of energy storage in all roofs is only 1.1%.

From the perspective of new installed capacity, 145000 new energy storage households were added in Germany in 2021, of which 93% were the energy distribution and storage of new photovoltaic cell systems, 7% were the transformation of existing photovoltaic systems, 215000 new photovoltaic households were added, and the proportion of energy storage and new photovoltaic construction reached 63%.

Analysis on the future development of permeability of energy storage system

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.

In the 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. It is assumed that the annual household power consumption is 4000 kwh, and the power consumption at night is 60%.

After the 5kw photovoltaic+10kwh energy storage system is installed, the annual photovoltaic power generation hours are 1000 hours, and the photovoltaic investment cost is 1.3 euros/w (equivalent to 9.1 RMB/w).

Then, the investment cost of energy storage is 0.8 euro/wh, and the residential electricity price is 0.3464 euro/kw. The initial investment is 14500 euros, including 6500 euros for photovoltaic system and 8000 euros for energy storage system.

According to statistics, the average annual income of German families is 56000 euros, and the cost of installing the optical storage system accounts for 25% of the family’s annual income. Compared with the whole life cycle (20 years) of power grid purchase, the energy storage cost of installing photovoltaic cell system can save 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.

In the medium term

The substitution of new energy is a deterministic trend. A large number of new energy are connected to the grid, causing grid pressure. To promote energy storage and installation, the higher the certainty and continuity of medium-term policy subsidies, the better. From the perspective of power grid stability, one reason is the power grid pressure caused by large quantities of new energy grid connection.

The government guides power generation through subsidies and other policies. The user configuration of energy storage is the result. The bottom logic of European countries’ subsidies for distributed photovoltaic cell system+energy storage is to reduce the power distribution pressure of the grid through the distributed pv battery system.

The UK was exempted from value-added tax on household photovoltaic cell systems from April 2022, Italy increased the tax exemption on household storage equipment to 110% from 2020, and Poland, Sweden and other countries set up budget subsidies for household optical storage systems.

In the long run

With the development of scale and technology, the cost reduction of pv battery system is a long-term trend. According to statistics, from 2015 to 2019, the cost of small pv battery system decreased by about 18%, and the cost of household energy storage systems decreased by nearly 40%. It is estimated that the cost of household pv battery system will further decrease by 2023, and the cost of residential energy storage systems will drop by 33%.

In the short term, due to the fluctuation of supply and demand, the cost of pv battery system fluctuates slightly, but the long-term trend of technology cost reduction is determined. In 2021, the LCOE of the household optical storage system was 10.1 euro cents/kWh, and that of the photovoltaic system was 14.7 euro cents/kWh.

In the same year, the household electricity price in Germany reached 31.9 euro cents/kWh, and the electricity cost of the optical storage system was 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.