This past week I attended the Intersolar Europe conference in Munich, Germany.  The exhibit hall at the conference included a large space devoted to energy storage and battery technology.  The number of exhibitors and quality of the exhibits surpassed anything I have seen at a storage programs in the United States.

The most interesting aspect of the storage exhibits to me was the large number of companies selling residential energy storage products.  Tesla was there exhibiting the Powerwall, which was striking as much for the beauty of its design as for its technical capabilities.  The new residential storage solution from Mercedes was also on display.  Saft announced a residential storage product at the show.  In addition, there were at least another ten, if not twenty, other companies also displaying residential energy storage products.

While I was pleased to see all of these companies getting into the business of selling residential energy storage systems, I was left wondering who was going to buy them.  In the United States, a market for residential storage does not, for all practical purposes, yet exist and an economic case for residential storage is difficult to make.  In Germany residential storage systems have been sold for several years, though the size of the market is not large.  The German experience may, however, provide some insight into what may drive the market for residential energy storage in America.

According to a presentation made at Intersolar Europe by Kai-Phillip Kairies of the Institute for Power Electronics and Electric Drives, German owners of residential energy storage systems surveyed as to the principal reason for their purchase of such systems, identified three principal reasons: (1) hedging against rising electricity costs, (2) a desire to contribute to national energy security, and (3) a general interest in energy storage. The survey response suggests that while the prospect of future economic benefit factors into customer decisions on storage, the principal motivators tend to be altruism and technological interest—fairly typical motivators of early technology adopters.

Adoption of residential storage in the United States will likely depend on the same motivating factors and rely on the same motivating factors.  The stylized designs of the Tesla Powerwall and the home energy storage system from Mercedes seem to signal that neither of those companies are relying on economics alone to drive market adoption of their products.

But the importance of the residential energy storage market should not be underestimated, even if it will be based initially on non-economically driven early adopters.  Early adopters also drove the market for rooftop PV solar, which is today becoming quite vibrant in the United States.  Early adopters have an outsized influence on government energy policy.  Rooftop solar PV has never really made sense from a policy standpoint, as there are far more efficient and cheaper ways to add renewable energy to the grid.  But advocates of rooftop solar have proven to be politically powerful and have undoubtedly shaped public sentiment in favor of the broader renewable energy agenda.  Residential rooftop solar may not be an optimal technology.  But as Terry Boston of PJM recently remarked rooftop solar has become a fire hazard:  Utility CEO‘s who have tried to oppose it often end up getting fired.

There may be a lesson here for the storage industry.  Residential storage may not represent the most efficient use of storage or where it might be most optimal to store electricity on the grid.  But promoting the residential storage market might prove to be a very effective way to build political support for a larger storage agenda in national energy policy.

On July 14 at the Intersolar North America conference in San Francisco, NAATBatt International will host a workshop on solar-storage policy.  The object of the workshop will be to identify the most effective ways of gaining more support for adding electricity storage to the grid.  The possible role that residential storage might play in promoting a large storage agenda will certainly be a topic of that discussion. I would encourage all who might have an interest in that issue to attend.