The German energy storage market will hit $1 billion within five years, according to new research by GTM Research.
In its latest report entitled The German Energy Storage Market: 2016-2021, the consultant predicts that Germany’s energy storage market will grow by 11 times in MWh between 2015 and 2021 to reach an annual value of $1.03 billion.
Germany is already one of the biggest energy storage markets, with 67MW of energy storage (128MWh), valued at $169 million at the end of 2015.
The report states that retail electricity prices for residential customers in Germany are up 47% since 2006, and unlikely to fall in the near future. Germany offers incentives to households for energy storage systems paired with new or existing solar installations. This incentive covered up to 30% of system costs between 2013 and 2015, covers 22% now and drops by 3% every six months.
GTM Research thinks these factors will help the residential sector keep its position at the top in Germany, of 49% of all megawatts installed in 2021. The report notes that Germany’s falling feed-in-tariffs, high electricity costs and large amounts of installed renewables, makes it an attractive market for energy storage.
“Germany already possesses one of the world’s largest residential energy storage markets,” said Brett Simon, GTM Research energy storage analyst and author of the report. “A number of variables, including declining feed-in tariffs, high electricity prices, and the KfW 275 program, are fuelling substantial interest in residential energy storage for self-consumption.”
GTM Research’s report suggests there are further opportunities for the country in utility-scale energy storage, Germany’s second-largest energy storage segment, with six primary reserve systems of 90MW expected to come online in 2016 and 2017.
“Utility-scale systems have been deployed for primary reserve for the past few years, though significant deployments did not begin until 2016,” notes Simon. “However, the market will saturate by the end of 2017, and thus utility-scale systems will need to pursue other value streams.”
At present non-residential energy storage, with only 2.7MW deployed in 2015 is Germany’s smallest market and the report states that it “lacks a clear economic case.”
However, as storage systems fall in popularity and new business models take their place, non-residential storage could grow, through virtual power plants and other solutions because Germany is already a strong energy storage market with a developed energy storage infrastructure that could be utilised across the entire storage supply chain.
GTM Research anticipates 161 megawatts (274 megawatt-hours) of storage to be deployed in 2016.
