Global solar battery market size was valued at $113.4 million in 2019, and is projected to reach $360.4 million by 2027, growing at a CAGR of 15.5% from 2020 to 2027. Solar battery is generally used to store solar power and discharge the power as per requirement. It is made of lithium ion or lead acid. Solar battery is rechargeable and can be generally used in solar cell systems to store excess energy. Some of the major applications of solar battery include solar charging stations, storage for power plants, and storage system for off-grids.
Significant surge in demand for eco-friendly and cost-effective energy solutions for industrial and commercial energy storage is expected to drive the market growth. Moreover, it is highly effective to reduce carbon footprint. As governments across the globe are promoting sustainable energy sources, the demand for solar battery is expected to increase during the projected timeframe. The implementation of solar battery in the residential and commercial sectors makes them energy independent and increase the self-reliance of the owner. In residential areas, it can reduce the usage of grid power in small-scale applications. This approach can further reduce the monthly electricity bill; thus attracting new consumers. Furthermore, growing interest of industry players toward renewable energy storage solutions is expected to secure new investments over the forecast timeframe. For instance, in 2020, one of the battery storage operators in Italy was awarded a contract of 95 MW solar battery storage for 2022-23 delivery.
Moreover, countries, such as the UK and Portugal, are encouraging capacity auctions for solar battery storage. Such developments will positively impact the market growth. However, the initial installation cost and high maintenance cost of solar battery are the major challenges for industry players. At the current stage, solar battery storage is highly dependent on government tax credit and subsidy schemes. In addition, the system’s water must be changed daily and the water must be distilled water. Attributed to such factors, the application of solar battery is limited for small residential areas.
Nonetheless, the growing prominence of energy trading with block chain and AI technologies opened new market opportunities. This will provide the owner of solar battery and solar PV systems a new opportunity to export the excess energy and sell it at premium price.
Asia-Pacific accounted for the highest revenue share in 2019, owing to rise in concern from governments across emerging nations, such as China, India, and South Korea, regarding renewable energy storage. This is expected to drive the solar battery market growth. Moreover, China being the largest producer of solar power will positively influence the demand for solar battery in this region.
The lithium ion segment accounted for highest revenue share in 2019. This is attributed to high charge and discharge efficiencies of lithium ion batteries, which help in harvesting large amount of energy. For instance, the average efficiency of lithium ion battery is 90-95%, whereas for lead acid it is around 80-85%.
The industrial segment accounted for the highest revenue share in 2019. This is attributed to strong demand from various industrial end-users for additional energy storage solutions. Moreover, new incentive and tax credit schemes from governments will further attract new end-users in this sector.
COVID-19 scenario analysis
- The global solar battery market had immediate impact of COVID-19 due to social distancing norms and shortage of manpower. These led to delayed installations and cancellation of new projects.
- In addition, the sharp decline in consumer expenditure highly affected the demand. Reduced expenditure of consumers during the lockdown highly impacted the solar battery market for solar products, including various solar storage systems.
- Moreover, the upstream and downstream channels have been affected due to restrictions on movement, which lead to increase in the amount of inventories.
- Furthermore, high dependency on Chinese exports for solar cell, solar battery, and solar module negatively impacted the market. India imports around 80% of its solar products from China. As the manufacturing firms in China were idle for the last 6-7 months, it highly impacted the production process in India.
- However, shifting trend toward remote working is considered a vital solution to improve the solar battery market conditions. Various automation companies utilize remote connectivity to ensure the access to field operators and service engineers who cannot be on site at this time.
- These companies are providing control room livestreams, process data, operational insights, and plant key performance indicators to users sheltering at home. Such developments are expected to provide new market opportunities in post COVID-19 period.
