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New competition in Home Energy Management (HEM) has begun for inverter manufacturers

Summary

If you are curious about how competitive the European solar PV and battery storage market is today, the smarter E 2023 has answered everything!

2,469 exhibitors from 57 countries took part in this year’s Smarter E / Intersolar, with a record attendance of 106,000 visitors. The packed exhibition halls certainly confirmed that solar PV, energy storage, EV charging and energy management are among the hottest topics in the European energy transition today.

Looking back at the market figures, this situation is not too surprising! Around 41.4 GW of new solar PV capacity was connected into the grid in Europe last year1. In terms of the number of installations, there has also been a big jump. According to LCP Delta, residential PV installations were up 64% in 2022 compared to 2021, and residential battery storage installations were up 83%.

The surging European PV and storage market in 2022 has attracted players from across the world and the ensuing investment has created many new competitors. We’ve seen a lot of new companies who offer integrated PV and storage systems at this year’s Smarter E, indicating an unprecedented level of competition in the current market. This has prompted us to seek insights from the major players exhibiting on a same question: which factors do they believe will be key to winning this competition? The most cited factors in the responses include:

  1. Advanced technology;
  2. Efficient supply chain management (e.g., channel management);
  3. Regulatory compliance (e.g., ESG indicators);
  4. And product differentiation.

HEM as a differentiator and value creator

In terms of product differentiation, we observed several leading inverter manufacturers releasing Home Energy Management Systems (HEMS) this year, which certainly stood out against other similar PV and battery products showcased in the event.

Inverter manufacturers are well positioned to offer HEM as their products are at the heart of prosumer energy management. At LCP Delta, we have been tracking the dynamics of the HEM market for the past few years and many HEM use cases we have summarised are well suited to be offered by inverter companies (such as self-consumption optimisation, ToU (Time of Use) tariff optimisation, peak capacity management, and system services provided through aggregated VPP (virtual Power Plant) platforms).

  • At the Smarter E, SolarEdge presented their latest HEMS, SolarEdge ONE, a platform that is already integrated with their own PV systems, batteries and EV chargepoints. It is also compatible with their partner ecosystems, including Samsung Electronics (via SmartThings IoT platform) and Vaillant (leading heat pump manufacturer). The system can also generally integrate with devices that are compatible with protocols such as OCPP (for EV charging) and EEbus (for HEM).
  • Following the acquisition of HEMS specialist Greencom Networks last year, microinverter manufacturer Enphase finally (but officially!) launched their HEMS. As a strong player in the residential sector, their HEMS are firstly compatible with their own products, while also connecting a rich ecosystem of partners, including heat pumps (from Dimplex, NIBE, Stiebel Eltron, Vaillant, Viessmann, etc.) and EV chargepoints (ABL, Vestel, Wallbox).
  • SMA was one of the first major inverter manufacturers to launch HEMS, and their Sunny Home Manager also received a lot of attention at the event this year. SMA confirmed to us that customer demand (from both new and previous inverter customers) for HEM products has soared in 2022. Therefore, they have achieved unprecedented sales growth for their HEMS due to the early launch of the products in the market.
  • Huawei also announced their new HEMS: an Artificial Intelligence Energy Management Assistant (EMMA) designed to integrate energy tariff information and automate asset control to maximise customer benefits. So far, the system integrates most of Huawei’s own products and is planned to integrate more assets from partners in the future.
  • Fronius showcased their multi-flow HEMS embedded in a hybrid inverter, with the main use case being PV self-consumption optimisation. The system is compatible with third-party EV chargepoints (Keba, Mennekes, etc.), heat pumps (IDM, NIBE, etc.) and also integrates energy management products from other companies such as Bosch and Kiwigrid.

What can we expect from the next few years of HEM competition?

The names mentioned above are not an exhaustive list, in fact if you take a look around the exhibition hall, you’ll find that more and more inverter manufacturers are launching integrated solutions with smart HEMS integration.

The competition for HEMS is not only from inverter manufacturers either. Due to the complexity of the ecosystem, any major energy equipment player in the residential sector can become a HEMS supplier. In the current market, competition might come from battery storage manufacturers (e.g., sonnen, Fenecon), heat pump manufacturers (e.g., Viessmann – who also sells batteries and PV in its portfolio, Samsung, Haier) and EV chargepoint manufacturers. There are also many software integration platform providers (Kiwigrid, gridX, Enode, etc.) who are active behind the scenes, offering direct or white-labelled products to market players.

However, ‘smart energy management’ can be a buzzword that overshadows the actual product functionalities and the services offered by each company. Our definition of a HEMS is not only a connected visual consumer application, but also needs the capability to autonomously optimise energy flows in response to energy tariffs, PV electricity productions and customer preferences.

  • At LCP Delta, we expect to see more diverse HEMS offerings in the coming years, with different levels of complexity: connected communication protocols, autonomous optimisation strategies, closed/open ecosystems, etc.
  • We expect the European HEMS market to grow at a CAGR of 40% from 2022 to 2030. From a niche market to a mass market, it will be equally interesting to see how these new propositions are bundled and delivered to end customers.
  • There is potential for synergies between market expansion and the maturation of value streams (e.g., net metering phase-out, ToU tariff rollout), therefore we also look forward to more opportunities for the commercialisation of HEMS.

 

 

 


1 https://www.pv-magazine.com/2022/12/19/europe-added-41-4-gw-of-new-solar-in-2022/

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