Outlook for the European Battery Energy Storage Market (2025-2029)
On May 7, 2025, SolarPower Europe, the European Solar Energy Association, released the European Market Outlook for Battery Storage 2025-2029 report, which showed that the European battery storage market experienced a slowdown in growth in 2024, but the market is expected to resume growth momentum in the next few years, especially the utility-scale energy storage market.
In 2024, Europe added 21.9GWh of battery energy storage systems (BESS), with a total cumulative energy storage capacity of 61.1 GWh, marking the European battery energy storage market's tenth consecutive year of annual growth in new installed capacity, a significant slowdown compared to previous years. Since 2020, battery energy storage deployment has almost doubled every year, with an average growth rate of 145% in 2022, while the annual growth rate in 2024 dropped significantly to 15%.
After several years of rapid growth, residential energy storage deployment in Europe falls by 11% in 2024, due to a fall in household electricity prices after June 2023, subsidy cancellations or reductions in key markets, and a decline in residential PV installations. Despite last year's decline, the residential energy storage market still maintains its leading position in the battery energy storage sector with nearly 11GWh of capacity, indicating that its momentum has not been completely cut. European residential energy storage is expected to fall to 33% of the market in 2025.
2024 is a turning point in the development of the European battery energy storage industry, as market and policy dynamics have changed dramatically in a very short period of time.
In 2024, the growth rate of the C&I energy storage market slows to 17%, with 2.2 GWh of new capacity added. Although the C&I market is still relatively small, its growth potential is huge, especially if policy and market conditions improve.
The utility-scale energy storage market in Europe has made breakthrough progress in 2024, with grid-connected capacity approaching 9GWh. The large-scale energy storage market is expected to continue to grow in deployment by 2025 and may surpass the residential energy storage market.
Although there has been a 17% growth in commercial and industrial (C&I) energy storage, its development is still limited due to immature profit mechanisms.
The three major battery energy storage markets in Europe - Germany, Italy and the United Kingdom - consolidated their dominance in 2024, with Austria and Sweden in the "top five". Germany maintained its leading position despite a decline in residential installed capacity and a slow adoption of large-scale energy storage. Italy's home battery market also declined, but the capacity surge in the large-scale energy storage market brought the market to another record high. The UK experienced a brief downturn due to the delay of large-scale projects, but it is still higher than Austria and Sweden. These two countries reached the GWh scale for the first time thanks to strong growth in the residential and commercial and industrial (C&I) markets. Overall, the top five markets accounted for 78% of Europe's new installed capacity in 2024, and the top five markets monopolized nearly 80% of the installed capacity.
The United Kingdom is the European leader in hybrid PV+BESS installations, accounting for 62% of total deployed capacity. This dominant position is driven by strong policy support, and favourable market conditions, which enabled the construction of Europe’s largest hybrid parks. Longterm financial incentives through a well-structured capacity market, an inclusive CfD framework, streamlined permitting, and market reforms enabling BESS to provide grid services have made the UK the most attractive hybrid market in Europe. Outside the UK, key markets include Sweden (10% of the hybrid PV+BESS capacity), Italy (8%), Germany (6%), Bulgaria (6%), and Denmark (5%). The remaining EU-27 countries and Switzerland collectively represent only 3% of installed capacity, highlighting the high market concentration in hybrid solar and storage deployment.
Looking ahead to 2025-2029, the European energy storage market will re-enter a high-growth track. According to SolarPower Europe's neutral forecast, new installed capacity will reach 29.7GWh (+36%) in 2025; annual deployment will increase by 41.9GWh (+41%) in 2026; 68GWh (+62%) in 2027; deployment will reach 90.8GWh (+34%) in 2028; and 118GWh (+29%) in 2029, with installed capacity reaching more than five times that of 2024.
The contribution of large-scale energy storage is expected to increase further. In 2025, large-scale energy storage battery systems (BESS) accounted for 55% of annual new capacity; by 2029, the power generation of large-scale energy storage battery systems (BESS) will exceed 80GWh, accounting for 68% of annual new capacity, while the deployment of BTM (Behind-the-Meter) energy storage at the household and commercial end will account for less than one-third of annual new capacity.
Compared with the expected growth of battery energy storage in Europe in 2029 and the EU's system flexibility demand of 780GWh in 2030, there is still a significant gap. In the short term, solving the key bottlenecks of industry development are difficult access, slow approval, and lack of market mechanisms. Large-scale energy storage will become the main force, while the release of industrial and commercial C&I and residential energy storage depends on further clarification of revenue models and policy support. In the next five years, the focus of the energy storage industry will shift from subsidy-driven to value-driven, and from user-side deployment to scale-level integration. Only with timely support from policy mechanisms, technological iterations to meet demand, and continuous expansion of funding channels can energy storage truly assume the core regulation capabilities of the new energy system and achieve a steady-state implementation of energy transformation.
