After years of progressive increase in residential market uptake of Energy Storage Systems (ESS), some market players have suggested we have exhausted the early adopters and are into the next stage of market maturity. That’s understandable, as first purchasers of home batteries were either wealthy buying brand-name batteries, or subsidy-driven buying the lowest priced option; now market demographics have changed to ‘middle Australia’.
However, by definition the first 2.5% of the market is Innovators; the next 13.5% are Early Adopters, then the next 34% are the Early Majority. With one-third of homes hosting a PV system, the PV market is in the Early Majority phase; if you exclude apartments and renters then the PV market is more appropriately in the Late Majority phase for home-owners.
At a national level, the ESS market is on the cusp of the Early Adopters market segment. The following chart plots the market penetration by state, calculated as the number of residential battery systems in each state, divided by the number of dwellings in each state in 2023.
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As with all things, there’s considerable variation by state. South Australia was a long-time leader in battery deployment, and crossed the Early Adopter threshold in 2020. ACT followed in 2022, and the NT in 2023 (with a stunning attachment rate over 50%). But the most populous states are still below 2.5% penetration, as is the national average. Adjusting these factors for home ownership pushes them all into Early Adopter territory, but still falls well short of Early Majority.
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Regardless of which market segment we’re in, consumer preferences are quickly evolving, and with them brand choice and system size. Batteries are becoming more commonplace, with one ESS installed for every six PV systems in 2023.
While enjoying reasonable growth, at current adoption rates it will take many years before batteries become prevalent, and with that the major benefits that they bring for households, neighbourhoods, networks, and the market as a whole. Batteries have healthy environmental and market benefits, facilitating greater uptake of PV and increasing the rate of PV re-use. Solving the barriers to deployment of large-scale renewables will take years, and the social licence for the transformation will be threatened, unless consumer energy resources fill the gap.
Obviously, affordability is key to battery uptake. Meantime society’s affordability challenge means consumers are willing to spend less on batteries, as illustrated by Queensland Home Energy Survey data analysis.
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Considering all the benefits batteries can bring when people can afford them, it’s time for a national subsidy.
Much more information on Customer Demographics and Consumer Interest is contained in the 2024 SunWiz Annual Battery Market Report. See https://www.sunwiz.com.au/battery-market-report-australia-2024/ to download a sample.