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Residential solar and storage markets in europe 2022-2026

Looking at the next five years, the question is not whether the residential BESS market will continue its upwards path, but rather how steep the growth curve will be.

In recent times, the rapid development of battery storage caught everyone by surprise, overshooting expectations by a large margin.

The current political and economic environment, characterized by high electricity prices and energy security concerns, has strongly improved the case for home storage in Europe – both from a business and a psychological point of view.

As the COVID-19 recovery packages and other measures contrasting the energy crisis become available to European households, we expect the R-BESS market to maintain a sustained growth path.

 After the European residential battery market passed 1 GWh in 2020 and 2 GWh in 2021, our Medium Scenario expects 3.9 GWh to be installed in 2022, up 71% from the year before.

Compared to last year’s outlook, we have significantly revised upwards our expectations: the 2022 market size we forecast this year stands above the 2025 High Scenario we anticipated one year ago. Following a steep two-digit growth trajectory, our revised Medium Scenario forecasts R-BESS deployment of 4.5 GWh in 2023, 5.1 GWh in 2024, 6.0 GWh in 2025, and 7.3 GWh in 2026.

Residential solar and storage markets in europe 2022-2026
Although 2022 will be soon ending, we have kept a fairly wide range of 2.2 GWh between the Low Scenario additions of 3 GWh and the High Scenario, reaching 5.2 GWh. Indeed, the market has been growing strongly in the first three quarters of the year, while demand was much higher, but it remains to be seen what will actually be installed in a year characterised by batteries as the major product supply bottleneck in a residential solar system. Even the pessimistic expectations of the Low Scenario are foreseeing a strongly expanding market in 2022, with 3 GWh of storage capacity installed and a 30% year-on-year growth, whereas the 5.2 GW High Scenario would result in a 128% growth. Although this might appear beyond reasonable expectations, the strong growth of the storage market has been very much a surprise in 2021 as well. By 2026, the European home storage market could be as large as 11.3 GWh, according to our High Scenario, while the unlikely Low Scenario foresees a market size of 4.5 GWh, about twice as large as in 2021. When looking at total installed residential battery storage capacities, our European Market Outlook 2022-2026 shows very high growth rates over the coming years.
As a market segment whose potential is still to be discovered, the annual growth of 74% in 2021 will be followed by a 73% increase in 2022. The next 4 years are supposed to see lower two-digit growth R-BESS rates in the Medium Scenario, linked to the growth of the residential solar rooftop market and based on increasing attachment rates to solar systems. In our Medium Scenario, we expect the cumulative residential storage capacity installed across Europe to reach 9.3 GWh in 2022, 13.9 GWh in 2023, 18.9 GWh in 2024, 24.9 GWh in 2025 and 32.2 GWh in 2026. Associated growth rates are consistently above 29% for all the interested years. Under the optimal conditions anticipated in the High Scenario, Europe's residential prosumers could operate a battery fleet as large as 44.4 GWh by the end of 2026, compared to 23.2 GWh in the Low Scenario.

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