Oil market turmoil caused by EU-wide sanctions against Russian oil and natural gas in response to the invasion of Ukraine pushes the European economics to re-examine energy supply and risks, and come up with plans to reduce their dependence on fuel oil. A German ESS supplier told InfoLink that it has seen order volume double year-on-year in the BTM market since the Russia-Ukraine conflict ignited. The war shed light on the importance of energy issue not only for the government but also the public.
The local dominates
Presently, Germany, Italy, the U.S., Japan, and Australia are the most developed residential ESS markets. Commonly seen suppliers include Tesla, Enphase Energy, NEC, Paineng Technology, BYD, Sonnen, LG Energy Solution, and Alpha ESS. Most countries, such as Germany, Japan, and the U.S., use ESS products made by local companies. The table below shows the market share of companies from several countries in Germany in 2020. German companies, including Sonnen, E3/DC, SENEC, and RCT Power together secured almost 60% of market share. In 2021, Tesla and Enphase Energy eared the U.S. over 60% of market share.
While expanding local businesses, companies also expect to tap into markets elsewhere. Yet, local businesses enjoy advantages over foreign counterparts. InfoLink attributes this to the following reasons:
Firstly, it is difficult for foreign companies to check on prices, for they do not have supply chain or cell manufacturing advantages as their local counterparts. In the meantime, import tariffs undermines the competitiveness of their products. Secondly, with safety on the top of buyers’ concerns, brand name is vital. Doubled with user preferences, most of them would choose products of local businesses.
Fig. Market share in German ESS market 2020
A residential ESS usually has 5-15kWh of storage capacity. Users choose their preferred capacity and integrate systems with solar energy or charging stations according to their own electricity consumption model. Presently, most ESS use lithium iron phosphate batteries, such as those of Sonnen and BYD. NCM / NCA batteries are the second-most deployed, as seen in products of Tesla and LG Energy Solution.
Examining the world’s five biggest cell suppliers, including CATL, LG Energy Solution, Samsung SDI, Panasonic, and BYD, companies capable of securing certain market shares in foreign markets are major cell manufacturers or their partners, for cells account for around 40% of ESS production costs. Thanks to that, related companies not only enjoy cost advantage, but have a bigger say when demand exceeds supply.
Residential ESS helps increase the reliability and independency of household power consumption. Besides types of cells and prices, consumers also consider brands when purchasing ESS, which is why domestic brands get larger market shares. Other factors influencing consumers include storage capacity, power rating, waterproof IP rating, operating efficiency, safety standard, and warranty.
Presently, it takes customers a year to a year and half to have a residential ESS delivered after placing the order due to robust demand. InfoLink compiled a list of ESS products of international companies for a quick glance of the market. Write to us at [email protected] and get a copy.