growth opportunities in the commercial battery energy storage market · 2 today’s presenter utham...
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Growth Opportunities in the Commercial Battery
Energy Storage Market
2
Today’s Presenter
Utham
Ganesh
Research Analyst
Industrial
Frost & Sullivan
• Energy Storage and Power Supplies expert.
• 3+ years of research and consulting experience.
• Bespoke consulting assignment providing the go-to-market strategies and due diligence for
for leading OEMs in the Global Battery Energy Storage space.
• Delivered 20+ research and consulting deliverables on energy convergence topics including
Batteries, Energy Storage, Electric Vehicle and Digitization of energy sectors.
• Devised Mergers and Acquisition strategy for a leading engine manufacturer.
Follow me on:
https://www.linkedin.com/in/utham-ganesh/
Photo
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Agenda
Source: Frost & Sullivan
1Motivations, Disadvantages and Key Influencers in the purchase
decision
Key Market Analysis for commercial battery storage2
3
4 Key Strategic Messages
5
Growth Opportunities in the Battery Storage Market
5
4
76%
62%
66%
64%
59%
64%
61%
62%
47%
Savings on electricity bill
Decreasing utility electricity usage during
peak hours to save on electricity bills
Incentives from the government
Environmentally friendly
Ability to store unused or excess energy
from solar panels
Decrease in dependence on energy
utility/provider
Ability to monitor/ control energy
consumption in the company
Use as a back-up power
Peer-to-peer energy trading with other
companies
Start of the Journey – Motivations to Purchase
Cost savings, avoid peak charges and ability to storage excess energy from solar PV are the top benefits.
To what degree would the following uses and benefits of battery energy storage systems motivate your company to start or continue investing in such system?
52%
54%
52%
50%
54%
46%
43%
45%
53%
73%
58%
62%
61%
59%
70%
70%
64%
63%
82%
80%
80%
73%
75%
71%
77%
75%
55%
84%
83%
80%
73%
77%
77%
74%
74%
55%
SpainItalyGermanyFranceUnited Kingdom
5
What is Holding Firms Back? Perceived Disadvantages
Across Europe, the main disadvantages are upfront cost, maintenance costs and the long payback period.
Base: All respondents
What disadvantages or concerns do you associate with battery energy storage solution?
SpainItalyGermanyFranceUnited Kingdom
Device is too expensive to purchase or
rent
Maintenance costs are too high
Payback time is too long
Cost and potential damage to the building
while installing this system
Fire hazard
Integration with our other energy
management solutions may be a problem
Solution is not tested properly / is not
properly developed
It is difficult to use
Solution does not work as it should / it is
expected from this kind of device
Other
I do not see any problems
36%
30%
28%
30%
27%
24%
27%
8%
18%
1%
8%
57%
53%
59%
64%
57%
54%
57%
58%
53%
51%
43%
41%
36%
48%
39%
37%
44%
35%
3%
33%
34%
30%
11%
21%
32%
15%
9%
14%
6%
37%
45%
38%
28%
20%
26%
19%
14%
11%
6%
6
People Influencing the Decision Making Process
Who is the Opinion Leader in Europe?
PV provider 56%
Facility Management Company,
Energy Service Company44%
Energy utility employee 33%
Energy consultant 33%
Electrician 28%
Sales manager(s) of battery manufacturer 22%
Base: All BES users
Q24. Whom did you ask before purchasing your battery energy storage system?
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Up-front payment. I own
and maintain the BES system
Lease model
Power Purchase Agreement
(PPA) Model
Loan model
32%
39%
23%
7%
How do commercial users want to pay for energy storage?
Payment methods for battery storage is inclined towards leasing model across Europe.
Base: All respondents (n=721)
Q44c. What would be your preferred payment model for battery energy storage solutions?
8%
79%
11%
2%
30%
43%
7%
20%
21%
26%
38%
15%
26%
33%
32%
9%
SpainItalyGermanyFranceUnited Kingdom
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US
Australia
United Kingdom
France
Germany
Italy
Spain
Non-PVS UsersPVS Users
2%
2%
2%
21%
12%
20%
10%
26%
20%
32%
30%
27%
27%
40%
42%
39%
26%
48%
47%
35%
44%
30%
31%
28%
4%
6%
2%
4%
4%
8%
18%
4%
6%
15%
18%
4%
12%
8%
2%
27%
27%
13%
16%
25%
27%
20%
22%
14%
23%
22%
22%
22%
30%
27%
24%
54%
54%
39%
39%
32%
5%
16%
4%
8%
2%
2%
6%
4%
1%
2%
2%
10%
We have it already installed
We are very interested in this solution and
will likely consider installing in the next 12
months
We are not interested at all
We are somewhat interested and will
likely consider installing in the next 5
years
We will likely show
interest once it becomes
standard
Do not know
Current and Future Adoption of Battery Storage SolutionsAcross Europe, there is a clear intent to adopt BESS among both PVS and Non-PVS users
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Revenue Forecast – Total Commercial Battery Storage Market
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Note: All figures are rounded. The base year is 2018.Source: Frost & Sullivan
0
50
100
150
200
250
300
2018
Re
ve
nu
e($
M)
0
200
400
600
800
1000
1200
1400
1600
1800
2025
$253M
$1663M
CAGR = 26.5%
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Key Markets – Country AnalysisGermany and UK will be the two major markets for commercial energy storage in Europe.
The ending of feed in tariffs in
2019 creates an opportunity as
feeding excess energy into the
grid becomes less attractive.
New tax exemption for self-
consumed energy is expected
to drive the uptake of storage
solutions.
Low BES penetration, but similar
to France the elimination of the
self consumption tax is expected
to fuel market growth.
One most attractive country’s
for commercial battery
storage owing to the high
demand charges.
The combination of high
electricity tariffs and the need for
increasing resiliency drives
demand for storage in Italy.
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Competitive Landscape–Commercial Battery Storage Market
Storage
System
Project
Development
System
Integration
Installation
and Support
Financing
options
Software
Capabilities
Asset
Management
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Developing financial
modelling framework
Understanding of the local
regulatory energy markets and
incentive policies
Flexible Business Models
Advent of Digitization
Source: Frost & Sullivan
Strategies to unlock the market potential
Critical
Success
Factors
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Key Recommendations – Reaching the Customer
Promote Alternative Payment Methods
Educate Consumers about Safety Measures
Target facilities subjected to high peak demand charges
Communicate Freedom
Leveraging Multiple revenue streams
Intensify Promotional Activities to PV system providers
Flexible payment models
Use BES Maintenance as Regular Customer Touchpoint
WHY PARTNER WITH FROST & SULLIVAN?
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For Additional Information
Jonathan Robinson
Research Director, Industrial
Utham Ganesh
Research Analyst