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Market Insight

Energy Storage Policy Insight - August 2019

September 09, 2019  | Subscribers Only

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Key policy announcements in August: 

Residential subsidies were launched Bavaria (Germany), London (United Kingdom), Oregon (United States) and the Australian Capital Territory.
Residential energy storage comes into focus as policy makers launch new subsidy schemes

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Residential energy storage comes into focus as policy makers launch new subsidy schemes

As the residential market continues to grow from annual installations of 1.8 GW in 2019 to 6 GW in 2025. Subsidy schemes have been important progressing uptake in new markets. The largest global markets – Japan and Germany – incentivised residential energy storage early on building on the high installed base of domestic rooftop solar. Australia has seen strong support from regional governments particularly in New South Wales and South Australia. These subsidies and favourable economics are leading to rapid market growth, with system shipments having reached 88% of the total 2018 shipments in the first half of 2019 based on data from the IHS Markit Residential Energy Storage Index.

In Germany a new subsidy scheme was introduced in Bavaria. The scheme offers €500 for a 3-kWh system and then €100 per kWh up to a total available subsidy of €3,200. The demand for the subsidy has been unexpectedly high, with more than 1,000 applications for the scheme made within two weeks of launching. One core trend observed in the early stages of the subsidy has been the increase in system sizes with an average of 10 kWh.

IHS Markit expects around 20 MW of residential energy storage to be installed in the United Kingdom in 2019. Following the removal of feed-in tariffs (FiT) for rooftop solar the market has struggled, but an increasing number of customers continue to install residential battery system to maximise savings from self-consumption. In August, the Mayor of London, Sadiq Khan has signed off on phase 3 of the Solar Together London scheme. £200,000 will be available for 700-1,000 rooftop solar systems in the capital, building on the 624 systems already installed under the previous scheme. The difference with this phase is that 15% of installations are expected to be paired with a residential storage system. Phase 3 will begin with a reverse auction in October (sellers offer their products at the lowest prices, opposed to buyers bidding with the highest prices). Installations will take place from November through to June the following year.

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