Home Energy Storage: Strong Growth in the Asian Market
Global Market: Overseas Home Energy Storage Demand Diverges, Emerging Markets Drive Growth
Demand side: We have summarized and calculated that the global household energy storage installed capacity will be about 10.4GW in 2023, doubling from 2022, with the European market and the emerging South African market growing more prominently. In 2023, Europe will still be the main force in global household energy storage installations, accounting for 65% of the world’s installed capacity, and the installed capacity will grow rapidly. In 2024, due to the combined factors of subsidy decline and high penetration rate in major markets, the European household energy storage installed capacity may decline; at the same time, the US market and emerging markets in Asia, Africa and Latin America are expected to see growth in installed capacity. We predict that the global household energy storage installed capacity will stabilize at 10.4GW in 2024 and rise slightly to 11.5GW in 2025.
European market: EASE expects new installed capacity to be 4.6GW/4.2GW in 2024/2025, respectively, and the installed capacity demand will decline. In 2023, the installed capacity of household energy storage in Europe maintained a relatively strong growth rate. EASE (European Energy Storage Association) estimated that the newly installed capacity in 2023 will be 6.9GW, a year-on-year increase of 130%, with Germany and Italy leading the high growth of installed capacity. EASE believes that after the substantial increase in installed capacity in 2023, the installed capacity of household energy storage in Europe will decline. There are two reasons: First, the installed capacity in major markets has declined. As the main market for household energy storage in Europe, Germany has a high penetration rate of household photovoltaics and energy storage (according to BNEF, the new household photovoltaic storage rate in Germany in 2023 reached 78%). As the growth rate of household photovoltaics slows down, the installed capacity may decline in 2024, and the subsequent growth rate will slow down. Second, subsidies in multiple markets will decline. In 2023, household energy storage in Italy ushered in a rush to install on the eve of the subsidy decline, driving the growth of the total installed capacity of household energy storage in Europe; in 2024, as subsidies in Italy, Spain and Belgium decline, the demand for household energy storage installations may be suppressed.
US market: It is estimated that the new installed capacity of household energy storage will be 1.5GW/1.7GW in 2024/2025, with a growth rate of 110%/15% respectively. In 2023, the new installed capacity of household energy storage in the United States will be 0.7GW/1.6GWh, with a power growth rate of 41%. In 2023, California’s NEM 3.0 policy officially took effect on April 15, 2023, changing the profit model of household photovoltaic storage systems. The yield of pure household photovoltaic systems has dropped significantly. At the same time, the economic efficiency of the household photovoltaic + energy storage “self-generation and self-use” model is relatively prominent, and the demand for household energy storage has ushered in growth. It is expected that NEM 3.0 will lead to a decline in household photovoltaic installations in the United States, while the storage ratio will increase, and the overall demand for household energy storage will increase. SEIA predicts that the installed capacity of household photovoltaics in the United States will decline by 13% in 2024, mainly affected by California’s net metering policy and interest rates. It is expected that the installed capacity of household photovoltaics in California will decline by 40% year-on-year; WoodMackenzie predicts that under the influence of NEM 3.0, the storage ratio of household photovoltaics in California will reach 60% in 2024, pushing the average storage ratio in the United States from 14% in 2023 to 25% in 2024. Based on the above analysis, we estimate that the installed capacity of household energy storage in the United States is expected to grow to 1.5GW in 2024, a year-on-year increase of 110%.
Other markets: including Japan, Africa, the Middle East, Southeast Asia, Latin America and other regions. It is expected that the new installed capacity of household energy storage in other markets will be 3.9/5.1GW in 2024/2025. In addition to the world’s top four energy storage markets, China, Europe, the United States and Australia, other markets mainly include Japan, Africa, the Middle East, Southeast Asia, Latin America and other regions. In 2022/2023, the total installed capacity of energy storage in “other markets” other than the top four markets (including large-scale energy storage, household energy storage, and industrial and commercial energy storage) will account for 10%/9% of the world respectively. Since the scale of other markets is relatively small and scattered, we use the proportion of global total installed capacity to make a rough estimate, assuming that the total installed capacity of energy storage in “other markets” will account for 10% of the global energy storage installed capacity in 2024/2025. (We estimate that the new installed capacity of global new energy storage will reach 65.2/84.5GW in 2024/2025 respectively. For the complete calculation process, see the 2024 mid-term strategy report). Considering the large-scale Japan and Africa in “other markets”, as well as the fast-growing Southeast Asia, most of the energy storage installed types are household storage. We assume that the installed capacity of large-scale energy storage/household energy storage/industrial and commercial energy storage in “other markets” accounts for 35%/60%/5% respectively. In 2024/2025, the total installed capacity of household energy storage in other markets will reach 3.9/5.1GW respectively, and emerging markets are expected to bring considerable installed capacity growth.
Global Competitive Landscape of the Residential Energy Storage Market
Supply side: Europe and emerging markets are the main stage for domestic enterprises, and some enterprises will still have outstanding performance under the demand differentiation. The global household energy storage market presents a situation of “heroes’ division”, and the dominant brands in different national markets are different. They usually include local enterprises with close proximity, such as Enphase, Tesla in the United States, and Sonnen in Germany; they also include domestic brands that have been deeply cultivated in one or several countries for a long time and established brand reputation and service system, such as PYLONTECH, BYD, and SmartPropel Energy.
At present, domestic household energy storage track enterprises are mainly exerting their strength in the European market and emerging markets such as Southeast Asia and South Africa, while the US market is more in the form of OEM. Product strength, channel layout and service capabilities constitute the core competitiveness of household energy storage enterprises. After years of accumulation, major enterprises have a certain reputation in their respective advantageous markets. In 2024, the growth of global household energy storage slowed down, but the demand in different markets showed differentiation, and the growth rate of emerging markets was better than that of the European market. Enterprises with a layout that focuses more on emerging markets and a leading market share in emerging markets are still expected to achieve outstanding performance.
The specific conditions of the major emerging markets for household energy storage vary, but there are some similarities in market characteristics and product demand:
(1) Socioeconomic conditions: mainly developing countries, with high population density, higher economic growth than developed markets, and a large electricity gap.
(2) Energy conditions: excellent resources such as light, good potential for renewable energy development; insufficient supply of fossil energy (mostly dependent on imports), and a demand for energy independence. The transmission and distribution infrastructure is poor, the power supply is not stable, and users are troubled by power outages.
(3) Demand for household energy storage: users are relatively sensitive to prices and pursue cost-effective products; power supply is the first demand, and there is demand for off-grid and grid-connected products; household storage and backup power products such as diesel generators have a substitution and complementary relationship.
Southeast Asia Market: Growing Demand for Residential Energy Storage Driven by Backup Power Necessity
Overview of Southeast Asia. Southeast Asia is located in southeast Asia and includes 11 countries: Myanmar, Thailand, Cambodia, Laos, Vietnam, the Philippines, Malaysia, Singapore, Brunei, Indonesia, and East Timor. All of the above countries are developing countries except Singapore. Southeast Asia is located in the tropics, with excellent sunlight resources and the potential for developing renewable energy. Southeast Asia includes two major parts: the Indochina Peninsula and the Malay Archipelago.
Indochina Peninsula: Thailand, Myanmar, Laos, Vietnam and Cambodia are located in the Indochina Peninsula. The Indochina Peninsula is located south of China. The terrain is “mountains and rivers alternate, distributed in vertical columns”. The terrain is high in the north and low in the south. The north is mountainous, the river drop is large, and the hydropower resources are rich; the south is plains and deltas, with flat terrain and relatively more developed economy. It is the main electricity consumption area and the preferred area for the development of photovoltaics. The main problems faced by the power systems of countries in the Indochina Peninsula include: insufficient fossil energy reserves, intermittent hydropower, mismatch between power generation and consumption centers, and weak grid infrastructure, which lead to high electricity prices for residents and the need to develop household energy storage systems.
Malay Archipelago: It consists of more than 20,000 islands, belonging to Indonesia, Malaysia, the Philippines and other countries. The Malay Archipelago is rich in oil and gas resources, and most of the power supply is thermal power. The islands in the Malay Archipelago are relatively scattered, and it is difficult to lay the power grid. The grid infrastructure is weak. In addition, there are threats of natural disasters such as typhoons and volcanoes. Residents have the need to install distributed and off-grid photovoltaic storage systems to ensure power supply.
Southeast Asia Regional Map
The demand for household energy storage in Southeast Asia is growing rapidly, led by the Philippines, Myanmar, and Vietnam. The national conditions of the major markets in Southeast Asia vary, but there are common characteristics: excellent photovoltaic resources, weak power grids, rapid growth in electricity demand, and mainly developing countries. Therefore, the demand for household storage products is mostly cost-effective + off-grid products. With the downward trend of prices in the energy storage industry chain, the demand for household energy storage in Southeast Asia has ushered in an explosion, becoming an emerging GW-level market.
From January to May 2024, the total amount of inverters exported by my country to Southeast Asia was RMB 1.25 billion, a year-on-year increase of 25%, and the growth rate was better than other regions in the world. From January to May, the top five markets for my country’s inverter exports to Southeast Asia were Thailand, the Philippines, Myanmar, Vietnam, and Malaysia, and the export value of the top five markets accounted for 90% of my country’s inverter exports in Southeast Asia. Among them, the inverter demand in the Philippines, Myanmar, and Vietnam is mainly household energy storage, the inverter demand in Thailand is mainly photovoltaic (commercial and industrial/centralized), and the inverter demand in Malaysia is mainly household photovoltaic. The Philippines, Myanmar, and Vietnam lead the growth of the household energy storage market in Southeast Asia.
Philippines: Driven by residents’ spontaneous demand for power supply, the household energy storage market is active. The Philippines is composed of more than 7,000 islands, with scattered land and weak grid infrastructure. In addition, natural disasters such as typhoons and earthquakes occur frequently, and household users have serious power outages. Residents have a rigid demand for backup power. Power supply companies in the Philippines are generally privately owned, and residential electricity prices are high. In December 2023, their residential electricity prices were as high as US$0.20/kWh. Filipino residents’ household electricity bills can reach more than 15% of their income. In addition, according to statistics from the Philippine Department of Energy, as of June 2023, about 8.85%, or more than 2.45 million households in the Philippines have not yet obtained electricity supply. Driven by the demand for power supply and backup, and saving electricity bills, the demand for household photovoltaic storage in the Philippines will usher in growth. Compared with diesel generators used for backup power, household photovoltaic storage systems have the advantages of being clean and noiseless. With the rapid decline in the cost of photovoltaic and energy storage systems, there is a trend in the Philippine market to use photovoltaic storage systems to replace diesel generation or complement it. The Philippine Department of Energy predicts that the country’s new photovoltaic installed capacity is expected to reach 1.98GW and new battery energy storage installed capacity will reach 590MW in 2024.
Myanmar: Household solar and energy storage provide shelter for vulnerable people. Compared with several other major markets, Myanmar is poorer and has insufficient electricity system coverage. In 2019, about 58% of the population, or about 30 million people, were not connected to the main grid. Under political turmoil and economic poverty, the power generation and transmission and distribution capabilities of Myanmar’s power system have been severely affected. Myanmar’s power supply faces problems such as the shutdown of large gas-fired power plants and the slow deployment of new power generation facilities. The gap between electricity supply and demand continues to widen; at the same time, the availability of transmission facilities has been affected by attacks and damage to the power grid during the conflict. The World Bank reported that since 2021, Myanmar has faced multiple long-term power outages across the country and fuel prices have soared. Myanmar has excellent sunlight resources, and distributed solar and energy storage systems are an important way to promote electrification and poverty alleviation for the country’s residents. Public welfare organizations such as the World Bank and Smart Power Myanmar are committed to providing electricity supply to residents in poor and off-grid areas and improving their ability to resist risks by deploying household solar and energy storage systems.
Vietnam: PV installed capacity ranks first in ASEAN, and off-grid photovoltaic storage systems are developing rapidly. Vietnam’s energy consumption structure is relatively diverse, with hydropower and coal-fired power being the majority in the north and photovoltaic power being the majority in the south. Vietnam’s terrain is in the shape of a “barbell”, with large ends and a narrow middle section. The geographical location of energy supply and load demand does not match, the transmission network is under great pressure, and there is a “structural power shortage” problem. Vietnam has superior photovoltaic resources, and the cumulative installed capacity of photovoltaic power in 2022 will reach 16.4GW, ranking first among the ten ASEAN countries. In April 2024, Vietnam approved the “National Power Development Plan 2021-2030” (PDP 8), planning to add 2.6GW of self-generated rooftop photovoltaic power and 300MW of large-scale battery energy storage projects on the grid by 2030. It should be noted that due to the high pressure on Vietnam’s power grid, there is a tendency on the policy side to promote users to generate electricity and use it for themselves. At present, Vietnam’s household photovoltaic grid-connected subsidies FiT have all expired. Household photovoltaic users are temporarily unable to obtain income through grid-connected, and need to allocate storage to improve their self-generation and self-use capabilities. In the 10 years from 2021 to 2030, if the new rooftop photovoltaic installation scale totals 2.6GW and 100% is equipped with storage, there will be an average annual demand for household energy storage of at least 260MW.
Thailand: The policy incentives for household energy storage are limited, and industrial and commercial distributed photovoltaics dominate renewable energy installations. Thailand’s energy structure is dominated by thermal power, and its own fossil energy reserves are insufficient. Natural gas relies on imports, so it has the motivation to develop renewable energy and ensure energy security. The stock of Thailand’s photovoltaic installed capacity is mainly centralized power stations, and the increase is mainly industrial and commercial rooftop photovoltaics. According to IEA data, in 2020, Thailand’s cumulative photovoltaic installed capacity was 3.94GW, of which 3.08GW was centralized power stations (accounting for 78%); the new photovoltaic installed capacity was 144MW, of which 125MW was industrial and commercial rooftop photovoltaics (accounting for 87%), and household photovoltaics only added 2.2MW. Thailand provides FiT grid-connected electricity price subsidies for distributed power stations (photovoltaic/photovoltaic storage), but the policy does not provide enough incentives for household photovoltaic storage users, and the total subsidy capacity cap is low (100MW/year), so household photovoltaic storage has not yet been developed. However, considering Thailand’s higher electricity prices compared to other ASEAN countries and its excellent photovoltaic resources, household photovoltaic storage has a certain growth space in the future.
Malaysia: NEM promotes the development of distributed photovoltaics, and the demand for household energy storage is relatively unobvious. Malaysia is an important participant in the global photovoltaic industry chain, and many Chinese, American and Korean photovoltaic cell and component companies have deployed production capacity in the country. The country’s own energy structure is mainly thermal power, and the installed capacity of non-hydro renewable energy is only 6% in 2022. Malaysia is actively promoting energy transformation. In July 2023, Malaysia released the National Energy Transformation Roadmap (NETR), planning to reach 31% of renewable energy installed capacity by 2025, 40% by 2035, and 70% by 2050. In terms of large-scale photovoltaics, the country launched a large-scale solar competitive bidding program (LSS) to reduce photovoltaic costs. In April 2024, the fifth round of bidding (LSS 5) with a scale of 2GW was launched to promote ground and commercial photovoltaic installations; in terms of distributed projects, the country provides NEM net metering solutions for photovoltaic participants (residents, commercial and industrial, government buildings), and the surplus electricity generated by distributed photovoltaics can be fully deducted from electricity charges. Under the NEM policy, residential users have the motivation to install household photovoltaics, but there is insufficient incentive for storage.
The household energy storage market in Southeast Asia is expected to exceed 1GW in 2024. According to the planning goals summarized in the previous article, the total installed capacity of household energy storage in the Philippines and Vietnam alone is expected to reach 0.85GW in 2024. Considering the rigid demand for household power reserve and self-generation in the Philippines, Myanmar and Vietnam, as well as the penetration potential of household energy storage in markets such as Thailand, Malaysia and Indonesia, we expect that the installed capacity of household energy storage in Southeast Asia will reach more than 1GW in 2024. Southeast Asia has become a rapidly emerging GW-level household energy storage market.
Pakistan and India: Surge in Solar Energy Storage Demand, but Policy Uncertainty Ahead
Pakistan and India: Strong Solar Energy Storage Demand Performance. From January to May 2024, China’s inverter exports to the Asian market saw rapid year-on-year growth, with Pakistan and India contributing the largest increments. During this period, China exported inverters worth 1.25 billion RMB to Pakistan, a significant 252% increase year-on-year, making Pakistan the largest market for China’s inverter exports in Asia for January-May 2024, both in terms of export value and growth rate. Inverters exported to India were valued at 1.17 billion RMB, an 85% year-on-year increase. Both Pakistan and India, located in South Asia, benefit from abundant sunlight and rapid economic and population growth, driving a strong demand for electricity and a need for expanded renewable energy development. However, these markets have a demand for developing their own photovoltaic industry chains, which may introduce some uncertainty in future export demand.
Pakistan: Backup Power Demand and Rising Electricity Prices Drive Residential Energy Storage Installations, Accelerating Lithium Battery Adoption
Power outages are frequent, and users have a need for backup power. According to 36 Carbon Analysis, the logic behind the explosion of household photovoltaic storage demand in Pakistan is similar to that of the previous South African market, both of which are backup power demands generated by power restrictions and power outages. Pakistan’s installed power capacity is mainly thermal power, but its own fossil energy reserves are insufficient and it relies on imports, and the power system has insufficient power generation capacity; at the same time, the power transmission and distribution facilities are weak and outdated, and the power grid is overwhelmed during peak power consumption periods such as winter and summer, and power outages have become the norm. Users have a demand for household storage for emergency backup power.
Electricity prices continue to rise, pushing up users’ motivation for self-generation and self-use. In order to obtain special funding support from the International Monetary Fund (IMF), the Pakistani authorities have raised electricity prices several times in the past three years to increase revenue in the power sector. According to local media Pakistan Today, the latest price increase occurred in July 2024, and the average basic electricity price for the 2024-2025 fiscal year will increase from 29.78 rupees/kWh to 35.50 rupees/kWh, an increase of 19%. Under the pressure of continuous increase in electricity prices, users have the motivation to equip themselves with photovoltaic storage systems and save electricity costs.
The policy has shifted from “net metering” (NEM) to “total metering”, and the proportion of household photovoltaic storage may increase. In May 2024, the federal government of Pakistan announced that it would cancel solar net metering and switch to “total metering”. The price of household photovoltaics selling electricity to the grid will be lower than its electricity price. This policy change may damage the economic viability of pure household photovoltaics and lead to a decline in household photovoltaic demand, but at the same time, the proportion of household photovoltaic storage is expected to increase, and users are expected to use energy storage batteries to increase the proportion of “self-generation and self-use”. As the cost of household storage decreases, users are more motivated to equip household photovoltaics with storage.
With the continuous growth of photovoltaic installations and the gradual penetration of household storage, the market space is broad, but there may be uncertainty on the policy side. According to Pakistan’s “Installed Power Generation Capacity Expansion Plan (IGCEP 2022-2031)”, the country will add 13.67GW of photovoltaic installed capacity in the ten years from 2022 to 2031, of which 4.32GW will be installed on the user side, and the average annual new household photovoltaic installed capacity is expected to reach more than 400MW. In the long run, users continue to have the demand for high-quality and low-cost electricity, and household photovoltaic and energy storage installations are still expected to continue to penetrate. It should be noted that Pakistan has a demand to independently develop the photovoltaic industry chain, and there may be certain uncertainties in future export demand.
India: Power Backup Demand Boosts Residential Solar Energy Storage Market
The growth target of photovoltaic installed capacity is ambitious. According to Infolink Consulting, in 2023, the Indian government released the National Electricity Plan (NEP) for 2022-2032, which is expected to reach 337 GW of cumulative installed capacity of renewable energy in 2026-2027, of which photovoltaics will account for 186 GW, accounting for more than 50%. According to MNRE installed capacity data, by the end of 2023, India’s cumulative photovoltaic installed capacity will be 73.3 GW, which means that India must add more than 110 GW of photovoltaic installed capacity in 3-4 years.
With the support of high subsidies and net metering policies, household photovoltaics are developing rapidly. India strongly supports distributed photovoltaic installations. Household photovoltaic users can obtain rooftop photovoltaic installation subsidies of more than 40% of the purchase price from the central government and the state where they are located, and obtain income tax exemptions, low-interest loans, net metering to save electricity bills and other benefits. According to statistics from JMKresearch, a local Indian consulting agency, in 2023, India’s new installed capacity of centralized photovoltaics and rooftop household photovoltaics will reach 6.5GW and 3.0GW respectively. The agency predicts that in 2024, India’s centralized photovoltaics and rooftop household photovoltaics are expected to have new installed capacity of 15.9GW and 4.2GW respectively. India’s household photovoltaic installed capacity is growing rapidly. Under generous subsidies, users have relatively little economic pressure to purchase household photovoltaics. Users can choose to add household energy storage as an optimized option to ensure power supply. With the demand for user backup power and the price reduction trend of the lithium battery industry chain, the penetration rate of household energy storage is expected to gradually increase.
Power outages bring users the need for backup power. India’s power system also has supply gaps and weak transmission facilities, which lead to frequent power outages. Reuters reported that due to a sharp drop in hydropower generation and delays in commissioning of a 3.6GW coal-fired power plant originally scheduled to go online in March, the Indian government expects the country to have the largest power shortage in 14 years in June 2024, with the peak power shortage reaching 14.2GW at night in summer. Indian household users face a more serious power outage problem. According to Statista data, a survey of 13,000 household electricity users in India in May 2023 showed that 57% of respondents said their families faced power outages of up to 2 hours a day, and 37% of households had power outages of more than 2 hours. Indian users have the need to purchase household storage systems to provide home backup power. If we adopt the forecast of 4.2GW of new household photovoltaic capacity in 2024 by JMK research mentioned above, and assume that 20% of household photovoltaics in India are equipped with energy storage in 2024, the annual new household storage capacity is expected to reach 840MW, and the combined household storage demand in Pakistan and India is expected to exceed 1GW.
India actively supports the local photovoltaic and energy storage industry chain and restricts the export of domestic components, but no restrictions have been imposed on the inverter link. India supports the local industry chain and has officially launched the ALMM list since April 2024, requiring that Indian government projects or government-subsidized projects can only use component manufacturers and products on the ALMM list, and impose certain restrictions on Chinese component manufacturers. However, since the value of inverters in photovoltaic and energy storage systems accounts for a relatively small proportion, and there are no leading inverter companies in India (according to JMK research, the top three companies in India’s inverter market share in 2023 are Sungrow Power Supply, Sineng Electric, and Italian company Fimer), it is unlikely that photovoltaic and energy storage inverters will be directly restricted. However, India’s restrictions on China’s photovoltaic industry chain may have a certain impact on photovoltaic installations, which may lead to uncertainty in the demand for energy storage inverters. The specific situation remains to be seen.
South Africa: Ongoing Power Backup Demand with Signs of Month-on-Month Improvement
South Africa is the largest household energy storage market in Africa. Demand declined in 2024, but has shown marginal improvement. South Africa is the largest market for photovoltaic storage inverters in Africa. In 2023, my country exported inverters to South Africa totaling 3.57 billion yuan, accounting for 72% of my country’s total inverter exports to Africa. As Africa’s largest economy and major coal producer, South Africa’s power structure is heavily dependent on thermal power. The aging of thermal power plant equipment and the weakness of power grid facilities have led to pressure on power supply. The power grid has adopted normalized power outages, which seriously affected residents’ daily production and life. Under the power crisis in 2023, South Africa’s demand for household storage for backup power has grown rapidly. Since the third quarter of 2023, due to a large amount of stocking in the early stage and seasonal factors, the scale of my country’s inverter exports to South Africa has declined. From January to May 2024, in preparation for the May presidential election, the rhythm of local business activities in South Africa was affected, and the previous inventory was still backlog, resulting in a decline in shipments. From January to May, my country’s inverter exports to South Africa totaled 490 million yuan, a year-on-year decrease of 79%. However, with the end of the election, the market is expecting power rationing to resume, and inventory has been consumed, and South Africa’s household solar storage demand has shown signs of improvement. In terms of monthly figures, the export value of inverters in April and May has improved month-on-month, increasing by 52% and 51% respectively, and the subsequent household storage demand is expected to continue to pick up.
The power rationing problem has been alleviated, but the logic of long-term demand for household storage remains solid. Power outages are a long-standing problem facing the South African power market, which are usually divided into planned power rationing (loadshedding) and unplanned outages (unplanned outages). Eskom, the South African national power company, prevents the collapse of the power system through planned power rationing. It will regularly publish a power rationing schedule on its official website, with power rationing in turn by region, and the duration of power rationing during the day varies from 1 to 16 hours. In addition, unplanned power outages may occur when there is a failure in the power grid or insufficient power supply.
In 2023, Eskom households and commercial and industrial users experienced a record 280 days of power outages (including planned/unplanned) up to 12 hours a day, mainly due to the repair and maintenance of the Kusile and Koeberg power stations. The unprecedented power outages have driven the demand for household energy storage in South Africa to explode in 2023.
In 2024, in order to gain support in the general election, the ruling African National Congress (ANC) is committed to solving the power rationing problem, and the power rationing has improved. As of July 4, 2024, Eskom has accumulated 100 days without power rationing, mainly due to the successful expansion of the Kusile power station, the use of thermal power peaking power stations during peak hours, and users have improved their self-sufficiency through household solar storage and other methods, alleviating the pressure on the power grid. However, unlimited power does not mean no power outages. In early July, Eskom said that the availability of its units had improved to a certain extent, and the power gap caused by unit failures and unplanned power outages had been reduced from 18,000MW to an average of 12,000MW. Users will still face unplanned power outages. The winter forecast released by Eskom on April 26, 2024 predicts that the planned power cuts in the winter of 2024 (June-August) will be controlled in the second stage (2-4h per day), and 15,500MW of unplanned power outages may occur.
South Africa’s policy side vigorously supports household photovoltaic storage systems, and the long-term demand for household energy storage is positive. From March 2023 to March 2024, the South African government implemented tax breaks for household photovoltaics. Installing photovoltaic modules above 275W can obtain a tax rebate of up to 25%, and each person can get a maximum tax rebate of 15,000 rand (about US$795). In August 2023, South Africa issued the Energy Bounce Back Scheme (EBB), and households and small and medium-sized enterprises can apply to banks for loans of up to 300,000 rand (about US$15,900) and 10 million rand (about US$530,000) respectively, for the installation of photovoltaic modules, energy storage batteries and other equipment. Infolink Consulting sorted out Eskom data. By the end of 2023, South Africa’s cumulative photovoltaic installed capacity will be about 7.3 GW, of which distributed projects will be about 5 GW. In 2023, South Africa will add 2.5GW of distributed photovoltaic installed capacity, a 47% increase from 1.7 GW in 2022. Due to the limited backup time of household photovoltaics, in the case of frequent power outages, residents often choose energy storage equipment to ensure power stability. “Distributed photovoltaics + household energy storage” has become an important choice for South African families. While South Africa’s household photovoltaics are growing rapidly, household energy storage is expected to continue to penetrate, and demand will be positive in the long run.
