The European energy storage market has always attracted much attention. Recently, SolarPower Europe, the European Photovoltaic Industry Association, released the "European Energy Storage Market Outlook 2024-2028". The report reviews the installed capacity of the European energy storage market in 2023, looks forward to the market situation in 2024, and predicts the trend of the European energy storage market from 2025 to 2028.

We have translated and organized this report, hoping to provide some useful information to industry professionals who are paying attention to the European market.

New and cumulative installed capacity of energy storage in Europe in 2023

In 2023, the newly installed capacity of the European energy storage market will be 17.2GWh, a year-on-year increase of 94%. The newly installed capacity will exceed 10GWh for the first time, and the cumulative installed capacity will reach 35.9GWh.

In 2023, the growth rate basically maintained the same as the previous two years, with the growth rates in 2021 and 2022 being 94% and 102% respectively.

In terms of the sub-sectors of newly installed capacity, the scale of household storage is 12GWh, the scale of industrial and commercial storage is 1.6GWh, and the scale of grid-side storage is 3.6GWh, accounting for 70%, 9% and 21% respectively.

By comparison, the new installed capacity of household storage in 2022 was 5.5GWh, and 2.4GWh in 2021; the new installed capacity in the pre-meter market in 2022 was 2.4GWh.

In 2023, new installations in all segments broke records. The specific situation is as follows:

The share of household storage increased by 7 percentage points to 70%, mainly due to the soaring energy prices during the energy crisis and the introduction of attractive energy storage incentives in a few countries.

New grid-side installed capacity fell by 6 percentage points to 21%. The installed capacity in this segment mainly came from the UK; industrial and commercial energy storage also fell by 1.3 percentage points to 9.4%.

Industrial and commercial energy storage has shown a clear growth trend. In 2023, industrial and commercial energy storage will reach 1.6GWh, exceeding GWh for the first time. And this segment is still in a very early stage.

Commercial and industrial energy storage presents a very high degree of certainty, mainly because many companies have begun to use energy storage to promote the electrification of production processes, especially in Germany, the United Kingdom and the Netherlands.

Looking at the cumulative installed capacity, it has increased from 18.7GWh in 2022 to 35.9GWh. Among them, household storage accounts for 63% of the cumulative installed capacity, mainly due to the growth of household photovoltaics, incentive fund plans and optimized approval procedures. It far exceeds the 27% of grid-side energy storage and 10% of industrial and commercial energy storage.

The development of the household storage market began to emerge after 2019. That year, the household storage market accounted for 45% of the total energy storage installed capacity in Europe, and the grid side accounted for 44%.

But starting from 2019, household photovoltaic and energy storage have taken a dominant position, because residents are eager to be independent from the grid, thus surpassing other grid-side and industrial and commercial markets.

Although not very obvious in the total installed capacity, the number of grid-side energy storage projects in Europe is growing faster and faster, exceeding other segments. The substantial growth in photovoltaic installed capacity has led to grid power attenuation and falling electricity prices, and energy storage can solve these problems. 

Top 5 European Energy Storage Capacity Additions by 2023

The top five European energy storage markets in 2023 include some traditional household storage powerhouses, such as Germany, Italy and Austria, as well as the long-term stable leader in the large-scale storage market, the United Kingdom. The Czech Republic is the new country to join the top five.

Overall, the TOP5 accounted for 82% of all new installations, an increase of 8 percentage points compared with 2022. Market concentration has further increased.

Germany once again became the undisputed leader, with 5.9GWh of new installed capacity, a growth rate of 152% compared to 2022.

Italy followed with an additional installed capacity of 3.7GWh, a year-on-year increase of 86%, with a focus on the grid side.

The third is the United Kingdom, with new installed capacity reaching 2.7GWh, a year-on-year increase of 91%.

Austria showed strong growth momentum, with new installed capacity exceeding 1GWh, a year-on-year increase of 95%.

The Czech Republic achieved stunning growth, tripling last year’s installed capacity and adding more than 900MWh, mainly due to its strong household storage market.

Forecast of new installed capacity in Europe from 2024 to 2028

2024 is a turning point for the European energy storage market. It is expected that the newly installed capacity of the European energy storage market will reach 22.4GWh, an increase of 31% compared with 2023. Germany, Italy and Austria, the leading markets for household storage, have all experienced a decline after reaching record levels in 2023.

Until 2023, the European energy storage market is still mainly driven by household storage. In 2024, as the impact of high electricity prices begins to fade, inflation decreases and interest rates remain high, the motivation to install electricity self-sufficiency becomes less strong. The attractiveness of photovoltaics and energy storage decreases. The new installed capacity of the entire European household storage market fell by 26% to 8.8GWh. The contribution of household storage to new installed capacity will drop from 70% to 39%. Although household storage has declined, large-scale energy storage such as industrial and commercial energy storage and grid-side energy storage is increasing.

Following in the footsteps of the UK, the pioneer in the large storage market, Italy will become the new market leader in the large storage sector in 2024. In 2024, the Italian large storage market is expected to install 5GWh. In 2024, the UK's new large storage capacity is expected to reach 3.7GWh. This will increase the new large storage capacity in the entire European market from 3.6GWh in 2023 to 11GWh. This will account for 49% of the new installations, more than any other market segment. What's more, 2024 is the first year that large storage has entered the 10GWh club. In 2023, the new household storage capacity reached 12GWh.

Industrial and commercial energy storage is becoming an attractive market in Europe, especially in countries like Italy, Germany and Sweden. It is mainly due to the larger scale of solar energy storage, better economies of scale, and also related to high electricity prices, faster approval procedures, easier construction and more convenient product acquisition.

More importantly, commercial and industrial energy storage provides three usage scenarios, improving the project’s financeability: self-consumption, frequency response, and providing balancing services.

Due to the above favorable factors, industrial and commercial energy storage is expected to reach 2.6GWh in 2024.

To sum up, according to our medium-term forecast, the European household storage market's newly installed capacity is expected to reach 22.4GWh in 2024, an increase of 31% year-on-year in 2023. Under high-prospect forecasts, newly installed capacity is expected to reach 30GWh in 2024. On the contrary, if delays in large-scale storage projects in the UK and Italy continue, and household savings in Germany and Italy further decline, with low prospects, new installed capacity is expected to reach 144.4GWh in 2024, which seems unlikely to happen. From 2025 to 2028, it will continue to grow at an annual growth rate of 30-40%. By 2028, the medium-term outlook forecasts that Europe will have added 78.1GWh of energy storage systems. Among them, grid-side installed capacity will be particularly prominent, accounting for 45% of newly installed capacity in 2028. Industrial and commercial energy storage installed capacity will account for 13%, while household storage installed capacity will drop to 29%.

However, no matter what the circumstances, household storage installed capacity in 2028 will double that in 2023, reaching 23GWh.

Due to the need for flexibility in the power system and the need for energy transfer, the energy storage time will increase significantly, from the current 1.5 hours to 4-8 hours.