Most people get this wrong:
They misjudge the size of the retrofit battery market
Which means their product offerings are sub-optimal. Because retrofitting storage requires different technical solutions & sales approaches, depending on what type of retrofit you’re doing.
So how do you define retrofit?
Definitions matter. Here’s why:
‘Retrofit’ means adding batteries to an existing, unchanged PV system.
But retrofit also means adding batteries to an existing energy storage system.
And some people consider ‘retrofit’ should include adding batteries to a PV system that increases in size. Whether that be adding panels to an unchanged inverter, adding a separate array with new inverter & storage, or replacing the existing PV system entirely.
Which of these do you consider ‘retrofit’? Where you draw the line?
Add a second inverter and – to fit under the maximum DNSP-permitted AC power – it will need to be smaller than a single replacement inverter. ESS manufacturers may judge a replacement system to be ‘new’ because it uses the same kit – but its a very different customer to a new sale.
It’s clear: you need a different solution for each market sub-segment.
So how big is each market sub-segment?
Data provided to SunWiz by the CER assists us in understanding the size of the market sub-segments. The CER tracks concurrent PV-ESS installations within its STC paperwork. SunWiz analysis is shown in the chart below, as explained beneath.
The left bar shows the % of PV systems installed in 2022 without ESS that were installed at new sites (cyan, 81%), versus those that replaced their PV systems (red, 13%), those that extended their PV system without a new inverter (orange, <1%) and those that added a second inverter along with new panels (blue, 5%).
The right bar shows the same information for ESS systems installed with new solar panels, whether it be a completely new site (71%), replacement of panels & inverter (13%), a second inverter installed with new panels (14%) or extra panels added to an existing inverter (2%).
Note these percentages are of concurrent PV+ESS installations. They exclude pure retrofits.
Key takeaways:
- the ESS market involves a lot more complexity than can be simplified into ‘retrofit vs new build’.
- adding a second PV system alongside an existing one is far more common than expected, particularly when an ESS is added. It is the key difference between a PV-only system and a PV+ESS system.
- a large chunk of customers are replacing their PV system, with or without storage – presumably because it is too small.
- It’s critical to note: THIS VARIES CONSIDERABLY BY STATE. The feedback you’ll get from one state will be markedly different from another state.
We haven’t covered the size of pure-retrofit segments: where the PV system is unchanged. But our report shows its also far larger than most people realise.
SunWiz’s 2023 Battery Market Report goes into more depth and detail.
