The European residential energy storage (RES) market experienced rapid growth in 2022 due to the energy crisis caused by the Russia-Ukraine war. However, despite relatively low electricity prices in France, the RES market did not see a boom as in neighboring countries. Manufacturers of residential energy storage systems are hopeful that changes in French electricity pricing policies will gradually lead to an increase in demand for residential energy storage.

Electricity Prices for European Households (February 2023).

Given that France’s electricity supply mainly comes from operational nuclear power plants, residential electricity prices in France have long been at a lower level within Western Europe. According to statistics from the Eurostat agency, the residential electricity price in 2022 was 0.2086 euros per kWh, which is 18% lower than the European market average of 0.2525 euros per kWh. Compared to Germany, France’s electricity prices are nearly half as much.

In 2022, the French government set a limit of 4% on electricity price increases. By the end of 2022, the government announced that this cap on electricity price increases would be adjusted to 15% in 2023. Adjustments in electricity policy are expected to result in higher residential electricity prices.

SolarPower, a European solar PV and energy storage group, reported that installations of residential energy storage in Europe increased from 650,000 homes in 2021 to over 1 million homes in 2022, driven mainly by the impact of the Russia-Ukraine war on energy prices. The company forecasts that the European residential energy storage market will reach 3.5 million homes by 2026.

The growth of the European residential energy storage market primarily comes from five European countries: Germany, Italy, Austria, the United Kingdom, and Switzerland. However, as one of Europe’s major economies, the French market lags behind.

The sales director of Kostal, a German inverter manufacturer, remarked: “Compared to neighboring countries, France is still a niche market.” According to LCP Delta, a French market research firm, nearly 566,000 households installed residential solar PV systems in France in 2022, with cumulative installations reaching 2 GWh. However, only 1,000 households installed residential energy storage systems, with an average installation capacity of 4 kW. In contrast, according to statistics from RWTH Aachen University in Germany, Germany installed 220,000 residential energy storage systems in 2022, with installed capacities of 1.2 GW/1.9 GWh.

Currently, electricity prices in France are only 0.2 euros per kWh, which is relatively low compared to other European countries, limiting the impact of the energy crisis on residential consumers, as emphasized by LCP Delta. Furthermore, subsidies for residential solar PV and storage systems have not yet been introduced in France. The cost of a 6 kW system is as high as 30,000 euros, and the return on investment for installing such systems is only 8%, with a payback period of 10-12 years. Additionally, relatively high loan interest rates reduce the attractiveness of installing residential energy storage systems, making them of interest only to affluent households interested in energy transformation.

However, Kostal has already detected recent market changes. This winter, the French government indicated that power outages might occur, significantly increasing consumer interest in residential energy storage. Kostal plans to launch a new generation of residential energy storage inverters with power ranging from 3 kW to 20 kW, offering flexible configuration and adjustable energy storage capacities. If demand in France increases significantly, installers can easily retrofit existing solar PV systems with compatible residential energy storage systems.

Enphase introduced a lithium iron phosphate battery storage system in the French market in April this year. With expected increases in French electricity prices, Enphase aims to promote residential energy storage systems to installers and end-users in France. Enphase’s French sales manager, Bouanane, mentioned that out of 100 solar PV installations in France, only 5% of customers opted for residential energy storage systems, whereas in Germany, this percentage is as high as 80%. The French market is still in its early stages, but it is currently the best time for installers to become familiar with residential energy storage products. Enphase is currently providing training and certification for French installers.

In contrast to the residential energy storage market in France, the market for residential heat pumps has experienced a significant boom. In 2022, nearly 550,000 heat pump systems were sold in the French market, including 350,000 air/water heat pumps. This can be attributed to the RE2020 regulation implemented in early 2022, which mandates energy consumption (including heating and electricity) to be below 100 kWh per square meter per year.

The market for heat pumps in France is currently mature, with the government promoting individual installations of heat pumps through direct subsidies and tax deductions. LCP Delta expects annual demand for heat pumps in the French market to exceed 1 million units. Currently, developers in France are installing residential solar PV and heat pump systems in newly built homes.