Fragmented Market Landscape in Residential Energy Storage: How Enterprises Form Key Competitive Advantages

Fragmented Market Landscape in Residential Energy Storage: How Enterprises Form Key Competitive Advantages

Date:2024-04-18


There are two main types of terminal products in residential energy storage: split units and all-in-one units. Residential energy storage systems mainly consist of energy storage batteries and inverters. Terminal products can either be a standalone energy storage battery system with an added inverter or an integrated unit combining both.

 

Energy storage batteries and inverters are the two main components of residential energy storage systems. Energy storage batteries store electrical energy, while inverters convert the energy for use by loads or grid connection. Depending on the form of the product provided, residential energy storage terminal products can be divided into two categories: all-in-one units and split units.

 

All-in-One Units: Energy storage batteries and inverters integrated into one device, typically sold and installed as a complete unit by a single brand, positioning the product in the high-end market.

 

Split Units: Terminal products consist of separate energy storage battery systems and inverter products. The energy storage battery system includes battery modules, BMS, etc., without the inverter, usually sold to installers who choose compatible inverters for installation. The cost for users is relatively lower than all-in-one units, with flexible installation and expansion options.

 

Currently, there are three main forms of international residential energy storage tracks. One is to provide battery cells to integrators, the second is to provide battery systems to installers, including batteries, BMS, cooling systems, etc., and the third is to directly provide integrated battery and inverter all-in-one units to end customers. The latter two models provide terminal products for consumers.

 

Residential Energy Storage Batteries and Systems: Different Emphases in Business Models of Domestic and Overseas Enterprises

 

Domestic participants have a complete battery industry chain and offer products with high cost-performance ratios. However, entering overseas markets typically requires forms of channel cooperation, with the business model focusing on providing battery cells and battery systems.

 

Overseas participants are closer to the end market, with strong brand awareness and service capabilities. The business model mainly revolves around battery systems and all-in-one units. The global residential energy storage market currently presents a fragmented landscape, where brand and channel are crucial competitive barriers. Residential energy storage systems and inverter products are aimed at end consumers, who are dispersed and have lower expertise, posing high demands on brand awareness and service capabilities for end enterprises.

 

This situation results in a fragmented landscape in the global residential energy storage market, with different advantages for brands in different countries. Brand image and channel layout constitute key competitive advantages for residential energy storage enterprises, requiring high-quality products and long-term accumulation.

 

Residential Energy Storage Inverters can be divided into Energy Storage Inverters and Solar-plus-Storage Hybrid Inverters

 

Energy storage inverters are devices that convert between AC and DC for energy storage systems, grid connection, and loads, with two major types: standalone energy storage inverters (PCS) and solar-plus-storage hybrid inverters (Hybrid). Standalone energy storage inverters are used for AC-coupled systems, while hybrid inverters are used for DC-coupled systems. Currently, domestic manufacturers primarily focus on standalone energy storage inverters for residential energy storage, while also promoting high-power hybrid inverter products.

 

Energy storage inverters are mainly sold as terminal products, commanding brand premiums. In scenarios where terminals are split for installation, energy storage inverters (standalone or hybrid) are products aimed at end customers, with brand premiums and customer recognition. In terms of application scenarios for residential energy storage products, there are essentially two categories: essential needs and economic needs. Essential needs primarily include backup power, which is the strongest demand for users in areas with unstable grids. Economic needs mainly focus on reducing residential energy bills, leading to applications such as increasing self-consumption of photovoltaics, residential solar-plus-storage charging, residential solar-plus-storage heating, and participating in VPPs to earn revenue.



Due to the booming residential energy storage market in recent years and the influx of many new players, some predict industry turbulence in the short term. After experiencing a period of high demand, this year's residential energy storage market continues to grow, with rising demand for various energy storage markets accompanying the further development of new energy sources.


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