Demand surges, residential energy storage in the semiconductor incremental market in 2023

Demand surges, residential energy storage in the semiconductor incremental market in 2023

Source: Starling Core Author: Aileen

With the superposition of multiple factors, household energy storage has become one of the most potential incremental markets

Geopolitical conflicts have led to higher electricity prices. Due to the maturity of energy storage technology and the decline in cost, energy storage will begin to grow rapidly in 2021. In 2022, due to the year-by-year increase in energy costs and electricity prices in Europe, the superimposition of the Russian-Ukraine war and large-scale overseas power outages, high electricity costs for residents and poor power supply stability will bring The high growth of household photovoltaics in the future will bring about an unexpected outbreak of the household energy storage market.

Policy plus code support. Tax relief + capital subsidies provide policy support, and the economic efficiency of household savings has improved as residents’ electricity prices continue to rise. Countries around the world have launched relevant policies to encourage household energy storage installations. Relevant policies can be divided into indirect tax relief and direct financial subsidies, thereby reducing household storage installation costs; with carbon neutrality and energy independence goals leading policy formulation, energy storage support policies are expected to continue or further increase.

High-yield economic drive. Under the trend of rising electricity prices for overseas residents, installing household storage for self-use can save more electricity expenses. Therefore, the rate of return of household storage is constantly increasing, which stimulates the continuous increase of household storage installations.

Global household savings pattern: the outbreak in Europe, the country is still in its infancy

In terms of application scenarios, different countries have different characteristics of the power market structure, and the development models corresponding to energy storage are also different. The European and American power markets are relatively mature and more market-oriented, and their energy storage business models are also more diversified. Especially under the influence of European national conditions, a large number of household storage needs have been generated. In comparison, due to the differences in residential structure and power structure in China, large energy storage (power generation side and grid side) is currently preferred. Therefore, domestic energy storage for household use is still in its infancy, and policy development is the main driving force.

In terms of pricing model, the price difference between home and abroad for household energy storage is the largest, which is higher than that of industrial and commercial energy storage and MW-level energy storage, and the price in foreign countries is nearly 133% higher than that in China (based on the highest price). CIF quotations are the main price, and the seller bears the main risk. At present, the domestic price of household storage products within 30kWH is 1.0-1.5 yuan/Wh, and the foreign price is 2.0-3.5 yuan/Wh, including batteries, BMS and casings, and a 10-year warranty for connecting wiring harnesses.

Overseas terminal pricing is also very high, with dealers and installers raising prices by 30%-50%, while domestic pricing is relatively low, guaranteeing 20%-30% gross profit. Under the overseas pricing model, labor wages and overseas travel expenses also increase costs. In addition, about 5% of repair/after-sales expenses need to be considered. Overseas sales prices are increased by about 30-50% through dealers and installers.

Analysis of Household Energy Storage Industry Chain

The upstream of the new energy storage industry chain is raw materials and core components, and its core components generally include battery packs, energy storage inverters (PCS), energy management systems (EMS), and battery management systems (BMS); the midstream is system integration Suppliers and installers integrate energy storage systems with raw materials, components, and equipment provided by the upstream; downstream applications include power system energy storage (power generation side, grid side), power consumption side, communication base stations, and rail transit.

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A panorama of the new energy storage industry chain

Source: Compiled by Core Mynah

Household energy storage is an energy storage system with battery + PCS energy storage inverter as the core. Together they constitute 80% of the cost of an electrochemical energy storage system. The battery cost constitutes 60% of the energy storage system cost, the PCS energy storage inverter constitutes 20% (its core semiconductor component IGBT), the EMS energy management system constitutes 10%, the BMS power management system constitutes 5%, and other accessories constitute 5%. The battery pack is the energy core of the energy storage system, responsible for the storage of electric energy; the PCS is the decision-making core of the system, mainly responsible for controlling the charging and discharging process, and performing AC-DC conversion; the EMS is the control core of the system, mainly responsible for data collection and network monitoring , Energy scheduling, etc. BMS is the perception core of the system, mainly responsible for battery monitoring, evaluation and protection, and balancing.

Competitive Landscape and Semiconductor Opportunities

The core of user energy storage is energy storage batteries and energy storage inverters. The barriers lie in the adaptation of batteries and energy storage inverters (PCS) at the production end and the terminal brand channels. The core competition for profitability lies in energy storage products and markets structure. For energy storage batteries, Chinese manufacturers take the lead in shipments. Ningde Times maintains the number one shipment in the world by virtue of its technology and cost advantages. The household storage market relies on early channels to accumulate Tesla’s main supply to the U.S. market. Power Technology is deeply involved in the European market. Deeply cultivate the domestic base station market. For energy storage inverters (PCS), the market share of Chinese manufacturers is gradually increasing. With the help of photovoltaic channels to increase the layout of energy storage, leaders such as Ginlong Technology, GoodWe, Deye, and Sungrow are expected to gradually grow.

Battery pattern: Tesla focuses on the United States, and Pinen Technology is deeply involved in Europe

In 2021, the global energy storage cell shipments will be 59.9GWh, of which Ningde Times, as the largest cell supplier, will occupy the top spot, with shipments of 16.7GWh, accounting for 27.9%; as the leader of household storage, Power Technology will ship 1.5GWh, Accounting for 2.6%.

Residential energy storage suppliers show obvious geographical distribution characteristics, Tesla focuses on the US market, and Paineng deeply develops the European market. According to S&P Global, the TOP3 household energy storage suppliers in 2021 are Tesla, Pine Energy, and BYD, accounting for 18%, 14%, and 11% respectively. Among them, the largest supplier in the German market is BYD, accounting for 26%, followed by local integrators such as Senec and E3/DC; the US market is dominated by Tesla, accounting for 55%; the Italian market accounts for up to 23%.

Inverter Structure (PCS): The market competition is fierce, and the shipments increase sharply under the strong demand

The pattern of household storage inverters is relatively concentrated, and the competition among manufacturers is fierce. CR5 accounts for about 58%. The market share of global user-side energy storage inverters in 2021 is as follows: Growatt ranks first, with a market share of about 13.8%, followed by Deye, Jinlang, Solaredge, and GoodWe, respectively. 12.4%, 10.9%, 10.3%, 9.8%.

The energy storage shipments of leading inverter manufacturers have grown rapidly. Since the beginning of 2022, the demand for household storage has been strong, and the shipments of domestic inverter manufacturers have continued to increase. Relevant agencies predict that the shipments of domestic inverter manufacturers will more than double in 2022. In 2022, we expect Sunshine to ship 6-7GWh, Achieve doubled growth, among which household storage is expected to increase from 10,000 units in 2021 to 100,000 units; Jinlang shipped 300,000 units, achieving a 9-10 times increase; GoodWe shipped 300,000 units, achieving a 4-4-fold increase With a 5-fold increase, Deye shipped 200,000 units, achieving a 2-3 times increase.

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Data source: Guruwatt Prospectus, Soochow Securities Research Institute, Chip Starling

Among them, the core component IGBT of the new energy storage inverter is mainly imported, and the domestic IGBT market is mainly occupied by overseas manufacturers such as Infineon, Fuji Electric, and Mitsubishi Electric. Among them, the highest proportion is Infineon with 29.3%.

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Market Shares of Major IGBT Manufacturers of New Energy Storage Core Components in 2021

Source: Compiled by Core Mynah

Energy Management System (EMS): the “brain” of the decision-making center

Compared with other subsystems, the energy management system (EMS) has a lower cost and a smaller market size. At present, the industry has not yet formed a leading enterprise, and because the energy management system is closely coordinated with the power grid, manufacturers need to have a comprehensive understanding of the operating characteristics of the power grid. In order to solve the needs of power grid operation in a targeted manner, it is generally provided by equipment manufacturers or system integrators. Overall, foreign energy management system providers are mainly Samsung SDI, LGES, Tesla, etc., and domestic energy management system providers are mainly BYD, CATL, and NARI.

Battery Management System (BMS): System Management Core

Benefiting from the rapid development of industrial control, energy storage, new energy vehicles and other industries, the BMS market has ushered in rapid growth in recent years. In terms of applications, the downstream applications of BMS mainly include consumer batteries (3C digital), power batteries (electric vehicles) and energy storage Batteries (defense industry, renewable energy, communications, medical health, etc.) and other fields. Among them, power battery applications accounted for 54%, consumer batteries accounted for 22%, and energy storage and other batteries accounted for 24%.

From the perspective of the main players of BMS, there are mainly three types of market participants. One is OEMs represented by BYD, Tesla, Geely, BAIC, and Xiaopeng; the other is battery manufacturers represented by Ningde Times, Sunwoda, Desay Battery, AVIC Lithium Battery, and Guoxuan Hi-Tech; Texas Instruments, Analog Devices, Infineon, NXP, Renesas Electronics, STMicroelectronics, Kelie Technology, Super Thinking, Synergy Technology, Huatai Semiconductor, Silijie, Shengbang, Jiehuat, Saiweiwei , Zhongying Electronics and other third-party manufacturers represented. However, the technical complexity of new energy storage BMS is higher than that of vehicle standard BMS. In the long run, there are not many opportunities for independent new energy storage BMS manufacturers, and eventually a competitive landscape dominated by battery manufacturers + new energy storage integrators may form.

system integration

Energy storage integrators now mainly have three models: the layout of the whole industry chain: batteries, PCS, BMS, and EMS are all self-produced, and the domestic representative company is BYD. Professional integration: Integrators purchase components from outside and specialize in system integration. This mode is rarely used in China, represented by foreign Doosan and IHI. Based on their own products, the transition from pure equipment suppliers to system integrators: This mode is most widely used in China , the representative companies are: 1) Jinlang Technology, Goodway, Deye Technology, etc., manufacturers of photovoltaic inverters who cut into PCS; 2) Yiwei Lithium Energy, Penghui Energy, etc., manufacturers of power batteries cut into energy storage batteries; 3) Manufacturers of PCS/BMS/EMS and other components from power equipment and electronic equipment, such as Jinpan Technology, Kstar, Kehua Data, Baoguang, and Kelu Electronics.

According to CNESA data, in the domestic market, among Chinese energy storage system integrators in the ranking of energy storage system shipments in 2021, HyperStrong, Diangong Times, Kehua Shuneng, Sungrow, and Xinyuan Smart Storage rank the top in shipments; In overseas markets, among Chinese energy storage system integrators in the ranking of energy storage system shipments in 2021, Sungrow, BYD, Wotai Energy, Kstar, Cooper Energy and Narui Jibao rank the top in terms of shipments.

terminal application

At present, the global household energy storage terminal market is relatively fragmented, the terminal brands and channels are generally scattered, and the regional markets are relatively concentrated. The overseas sales of domestic enterprises are mainly distribution and OEM, and the brands and channels are mainly overseas integrators, distributors and dealers, etc. There are also differences in the advantageous market areas of each enterprise.