Italy could be poised to overtake Germany as Europe’s top energy storage market after the turn of the decade, a new report predicts. 

The European Market Monitor on Energy Storage, compiled by Delta-ee on behalf of the European Association for Storage of Energy (EASE), forecasts Italian behind-the-meter installations could soar after 2021.

The market will be driven by local subsidies, coupled with a strong solar market, said report author Valts Grintals, product manager for the energy storage research service at Delta-ee.

Unlike previous reports, which tended of focus on single European energy storage markets, this market monitor has a pan-European scope, covering Germany, the United Kingdom, Italy, France, Iberia, the Nordics, Central and Eastern Europe, and the rest of the continent. 

It shows, for example, that the Nordic countries could see strong demand for commercial and industrial energy storage systems, coupled to the growth of data centers in the region. The research also allows for comparisons between subsidy- and non-subsidy-driven markets.  

Germany and Italy are good examples subsidy-driven markets. Alternatively, the U.K. has scaled purely on the back of decreasing costs for energy storage and market signals, just as solar feed-in tariffs are phased out.

In the U.K., behind-the-meter storage still does not really make much economic sense. But the market is starting to take off regardless, in part thanks to off-the-shelf solar-plus-storage offerings such the one launched by Ikea in August.

Ikea estimates the systems will save homeowners up to £560 ($741) per year, or about 67 percent more than the savings from solar panels alone, allowing for a 12-year payback for a typical customer, or a 6 percent annual return on investment.

The growth in behind-the-meter storage in Britain reflects a predicted decline in the importance of front-of-meter installations across Europe.

The finding reaffirms a trend revealed in previous studies, such as 2016 research by Bloomberg New Energy finance that forecasted worldwide behind-the-meter storage would overtake utility-scale installations between 2020 and 2021. 

The same trend is underway in America. GTM Research projects that behind-the-meter systems will make up half of the U.S. storage market by 2021.

A more surprising trend highlighted in the European monitor is the emergence of energy storage markets that have not experienced substantial subsidy-based solar buildouts.

Germany, Italy and the U.K. were Europe’s top three solar markets (and fourth, fifth and sixth worldwide) by installed capacity at the end of 2016, according to SolarPower Europe’s 2017-2021 Global Market Outlook.

Tying batteries to rooftop solar is a big driving force for energy storage adoption in these countries. But in the future, Europe will see capacity installed in countries such as Ireland and Norway.

Here, Delta-ee believes energy storage adoption will be helped by the spread of electric vehicles.

Electric vehicles can potentially work as battery storage units on their own. However, until vehicle-to-grid technology matures, Delta-ee predicts homeowners may want to buy additional batteries to have more flexibility in vehicle charging.

Currently, said Grintals, behind-the-meter storage and electric-vehicle charging are being considered together. "Storage players in the market are offering chargers in addition to the battery, so it’s part of the package. They would both work within the same household.”

Overall, the story is about a transition from markets linked to subsidies or solar to ones that are less dependent on government support and where factors such as EV ownership are propping up battery adoption.

This second wave of European energy storage markets should begin to emerge from 2021 onward, said Grintals. Before then, there are "a few regulatory issues that need to be sorted out,” he said.  

EASE is aiming to track developments by publishing the market monitor twice a year.