GLMS SEC has released a research report indicating that the global residential energy storage market across multiple regions is expected to enter an upward cycle by 2026. Subsidies in various countries, combined with escalating geopolitical conflicts, may drive up natural gas and electricity prices, shortening the payback period for residential storage investments and potentially boosting demand in Europe. The expiration of subsidies in 2025 is anticipated to trigger a rush for residential storage installations in the United States, with installations expected to remain high from 2026 to 2031. Additionally, electricity shortages in emerging markets and declining costs of solar-storage systems are likely to sustain strong demand.
Key insights from GLMS SEC are as follows:
Europe: Well-established revenue models, subsidy incentives, and geopolitical tensions are expected to drive significant demand growth. Europe's high proportion of wind and solar power generation strains grid capacity, creating a need for energy storage. Between 2022 and 2024, the average penetration rate of residential storage relative to residential solar in Europe was 20%, indicating considerable room for growth. Improved economic viability due to net metering phase-outs, dynamic electricity pricing, and virtual power plant (VPP) mechanisms, along with national subsidies and potential energy price increases from geopolitical conflicts, are expected to shorten payback periods and boost demand.
Australia: High residential solar penetration and low storage adoption rates, coupled with subsidies, are driving demand. By the end of 2025, rooftop solar penetration in Australia reached 39%, while residential storage penetration stood at only 10.6%, suggesting significant growth potential. Government subsidies introduced in July 2025 spurred a 305% year-on-year increase in new residential storage installations in the second half of the year, totaling 183,000 units. An additional subsidy budget announced in December 2025 is expected to sustain strong demand into 2026.
United States: Electricity shortages, rising prices, and VPP-enhanced economics are expected to sustain high demand. The expiration of subsidies in 2025 is likely to trigger a surge in installations. Looking ahead to 2026–2031, third-party ownership (TPO) models for residential systems, which qualify for continued tax incentives as commercial projects, may serve as alternatives to customer-owned systems. Combined with electricity shortages, rising prices, and economic benefits from participating in grid services via VPPs, residential storage installations are projected to remain elevated.
Emerging Markets: Electricity shortages and declining solar-storage system costs are fueling demand. Countries such as India, Pakistan, Southeast Asia, and Africa, with their fragile power systems, face urgent needs for reliable electricity, supported by falling costs. In the Middle East, including Iraq, Israel, and Lebanon, frequent geopolitical conflicts and electricity shortages are further stimulating demand for residential storage.
Risks include potential policy shortfalls, intensified competition leading to sharper-than-expected price declines, and unexpected fluctuations in raw material costs.