Solar-plus-storage grid parity sweeps through top EU markets

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
Storage systems installed across Europe’s homes will boom by a factor of five to hit a cumulative 6.6GWh by 2024, the firm predicted (Credit: Wood Mackenzie)

The costs of residential solar-plus-storage have already dropped or will only take a few years to drop to nation-wide grid averages across key European markets, according to Wood Mackenzie.

Storage systems installed across Europe’s homes will boom by a factor of five to hit a cumulative 6.6GWh by 2024, the firm predicted in its latest analysis.

The update, released on Tuesday, expects the annual pace of continent-wide additions of residential energy storage to double by 2024, rolling out 0.5GW/1.2GWh by that year.

According to Wood Mackenzie’s Rory McCarthy, the momentum will be driven by the “economic tipping point” residential storage is experiencing, particularly around solar-collocated systems.

These hybrids are, the senior research analyst explained, fast leaving behind the “challenges” of past years and approaching grid parity status across major European countries.

Contacted by PV Tech, McCarthy noted the milestone – meaning system costs are equal to the average power prices paid by households – was already reached this year in Germany and Italy.

The former, also the EU’s currently undisputed top PV market, continues to lead thanks to its “world-leading” incentive programme from 2013 but is now “slowing down”, McCarthy said.

Germany's looming solar feed-in tariff cap could kick in by 2022 and see the country's residential storage slump further starting in 2023, the analyst noted.

Meanwhile, Italy’s conducive policies will push it in the opposite direction, added McCarthy, who expects “significant growth” going forward in the Southern European state.

Spain jumps ahead while France, UK trail behind

According to Wood Mackenzie, the shift in economics of European residential storage will see the segment transition from “emotive purchase” to “sound investment decision”.

The firm estimates that Italian and German systems will achieve a positive net present value or NPV – meaning investments will trigger a positive return – in 2021 and 2022, respectively.

According to the firm, the economic improvements will gradually spread from the two markets to others in Europe, but the transformation will not reach all equally fast.

Spain, for one, looks set to become a residential solar-plus-storage hotspot. High irradiation could help the country’s hybrids hit grid parity in 2020, Wood Mackenzie believes.

Noting Spain’s “damaging” past solar policies, McCarthy said: “New government thinking – with a nudge from the European Commission – means the country will embrace self-consumption.”

For their part, French and British residential solar-plus-storage will fail to hit grid parity by 2024 as systems remain costly and policies unsupportive or undeveloped, the analyst pointed out.

As Wood Mackenzie noted, cost efficiency gains will not save European residential storage from having to address its “challenging” customer proposition.

“We think one of the greatest barriers to entry are high upfront costs,” McCarthy said, pointing at firm’s estimates that storage systems can add 93% to the average costs of German residential solar.

Providing solar-plus-storage at no upfront cost from the supplier could help, McCarthy argued, adding: “However, this will only be feasible in regions where there is a positive investment case.”

Read Next

May 13, 2021
Spanish oil major Repsol has made its first foray into the US renewables market with the acquisition of a 40% stake in solar and energy storage project developer Hecate Energy.
May 13, 2021
The solar module manufacturing subsidiary of Italian utility Enel is aiming to scale up annual production capacity to 3GW in the second half of 2023, the company has confirmed.
May 11, 2021
Solar-plus-storage is on offer from Swell Energy to Southern California Edison (SCE) customers enrolling in its two virtual power plant (VPP) programs, which are set to boost local resilience.
PV Tech Premium
May 10, 2021
Andy Colthorpe takes a look at what’s happening and what’s expected to happen in the Japanese large-scale PV market, with data and analysis courtesy of RTS Corporation and interviews with Vena Energy Japan, Sonnedix Japan and Baywa Japan.
May 7, 2021
Danish utility giant Ørsted has completed its first utility-scale solar-plus-storage facility in the US.
May 6, 2021
Independent power producer has Opdenergy has postponed an initial public offering (IPO) just days before its shares were due to start trading on the Spanish stock exchanges.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
May 26, 2021
Session 1 - 7:00 AM (BST) | Session 2 - 5:00 PM (BST)
Solar Media Events
June 15, 2021
Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021