Germany Energy Storage Market

The German government aims to achieve greenhouse gas neutrality by 2045. To reach this goal, renewable energy is expanded throughout the country. By the end of 2020, 46% of the electricity mix have already been produced from wind and hydropower, photovoltaics, and biomass. By 2030, this number is planned to increase to 50% and by 2050 at least 80% of energy is supposed to be generated by renewables.

Increasing the share of renewables poses new challenges: Excess energy produced during off-peak hours needs to be stored and made available when needed. Since energy storage systems (ESS) can balance supply and demand, they are an essential part of Germany’s energy transition. In line with this, the market for ESS is constantly growing. According to the German Energy Storage System Association (BVES), the industry grew by more than 10% to € 7.1bn ($ 8.2bn) in 2020. While almost half of the turnover was generated in the private sector (€ 3.5bn / $ 4bn), system infrastructure and industry were the second and third most relevant sources of revenue with € 2.1bn ($ 2.4bn) and € 1.3bn ($ 1.5bn), respectively.

Growth Trends

The demand for applications such as stationary batteries, private personal vehicle batteries, and lithium-ion batteries, is expected to remain high and increase throughout the next decades. Especially the private and commercial sector are driving growth, particularly when it comes to system integration, sector coupling and electromobility. In 2020, more than 100,000 home storage units were implemented across Germany, bringing the total number to 300,000. In 2018, photovoltaic (PV) and energy-storage for households reached grid-parity: storing PV energy with batteries became cheaper than the price from the public power network. However, the majority of PV systems in Germany are not yet connected to batteries – in 2018 only 8% were equipped accordingly. It is expected that by 2028, this number could increase to over 80%.

Opportunities and Market Entry for U.S. companies

There is potential in various areas for American businesses to join the German energy storage system market. Especially the growth of the household sector is set to offer opportunities, as privately owned PV are installed increasingly often in conjunction with batteries, while existing systems are retrofitted. Another prospect is the connection of small household storage devices to larger units as well as the setup of district storages, which demand large-scale batteries. With these developments, new business models, such as renting and leasing, are expected to emerge in Germany.

For a successful market entry, it is important for American businesses to join clusters, initiatives, committees and (specialist) working groups. Participating in such programs allows companies to gain a head start in learning about potential projects, meeting potential project partners, presenting their solutions, gaining visibility in the sector, as well as access to subsidies and business cases.

For more information, please contact the U.S. Commercial Service in Berlin at office.berlin@trade.gov.