New GridX report reveals potential for the home energy management market in Europe

Distributed energy resources (DERs) are currently experiencing rapid growth across the continent. The photovoltaic (PV) market in particular is making great strides; fueled in part by the energy crisis, more and more people are seeking independence from high electricity prices and increasingly seeking to maximize self-sufficiency with their own solar power.

The report forecasts significant expansion of the European HEMS market, with an expected 11-fold increase by 2030. According to consulting firm LCP Delta, around one million households in Europe are already equipped with HEMS, and by 2030 this number is expected to reach around eleven million.

Looking at Europe as a whole, it is clear that HEMS expansion and use cases vary significantly across countries. In the north, Sweden and Denmark lead the seven countries analyzed in terms of electric vehicle and heat pump integration.

Sweden shows an impressive heat pump capacity of 22.5 kW per 100 inhabitants, while Denmark accounts for 11.4 kW. The Netherlands shows its dominance in the photovoltaic sector, largely driven by the success of net metering: at the beginning of 2024, more than a third of all roofs are equipped with solar panels. Its neighbor Germany ranks among the leaders when it comes to privately installed battery capacity (average 20 kWh) and installed photovoltaic capacity (99 kW) per 100 inhabitants.

There is still room for improvement when it comes to heat pumps and battery electric vehicles (BEVs) per capita. Italy and Spain are showing significant progress in the spread of home storage, each reaching 19 kW per 100 inhabitants – clearly above the European average of 13 kW. On a further positive note, almost 25 percent of all German households say they plan to install a HEMS in the next two years.

The gridX report identifies the UK as a country lagging behind, falling behind the European average in most categories of this analysis: notably installed solar PV capacity (23kW), electric vehicles (1.4kW) and heat pumps (0.6kW) per 100 people. The country’s poor performance in heat pump installations and installed capacity should be a strong signal of improvement for policymakers in the country. However, with ambitious targets and increasing government funding, the UK shows significant potential for rapid growth in the coming years.

The energy sector is currently undergoing a rapid transformation. With increasing electrification and the continued shift to renewable energy generation, not only do consumers need to change their habits and energy market players need to transform, but regulations must also adapt to encourage a new era of clean energy. In many countries, including Germany, governments have begun to take action, creating new incentives to encourage more consumers to switch to clean energy assets or explore new use cases. One of the most recent and well-known examples is Section 14a of the German Energy Industry Act (EnWG), which allows grid operators to dim energy-consuming devices to behave in a more grid-friendly manner.

On the other hand, in Sweden the introduction of comprehensive smart meters and a successful tax deduction program for self-consumption models have encouraged more advanced use cases, exploiting aggregated flexibility on a small scale.

While each market is developing differently, one thing is common across all European markets – the rapid growth in DERs makes HEMS absolutely essential, but the key differentiating factor will be the ability to adapt and scale as the market continues to evolve.

“We are seeing clear signals from European consumers that they want to electrify their homes and integrate their systems,” said Tim Steinmetz, Managing Director of gridX. “It is now up to energy players to deliver future-proof, holistic solutions to gradually unlock greater value from different use cases. The gridX toolkit, consisting of a secure and robust gateway, a modular cloud platform and end-to-end services, ensures a fast and efficient go-to-market with a HEMS that grows with your business.”

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