Residential Backup Power Market Size, Share & COVID-19 Impact Analysis, By Technology (Generator, Battery, and Fuel Cells), and Regional Forecast, 2022-2029

The global residential backup power market size was valued at USD 9.51 billion in 2021. The market is projected to grow from USD 10.32 billion in 2022 to USD 17.28 billion by 2029, exhibiting a CAGR of 7.6% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with residential backup power experiencing higher-than-anticipated demand across all regions compared to the pre-pandemic levels. Based on our analysis, the global market exhibited a growth of 19.6% in 2020 as compared to 2019.

Residential backup power uses various standby power sources to provide home electricity in cases of power cuts or grid failures. The increasing dependence on electric-powered appliances in homes due to urbanization and a fast-paced lifestyle has made it necessary for homes to have a consistent supply of electric power. The rising power cuts due to various natural disasters have enhanced the adoption of residential backup power. Consumers use different technologies for standby power such as power generators. The growing adoption of renewable energy has enhanced the usage of battery energy storage and fuel cells in the past few years.

COVID-19 IMPACT

Enhanced Adoption of Residential Backup Power due to Increased Power Demand in Homes During COVID-19 Pandemic

The spread of the COVID-19 pandemic led to many countries imposing lockdowns and closing international trade borders. With widespread supply chain disruptions and the reduction of manufacturing potentials across various industrial domains, the reliance on electronic devices and IoT increased. There was a rise in work-from-home culture in the COVID-19 period, along with online schools and colleges. There was also a rise in online shopping, which uses smartphones and laptops that need power for charging. This led to a massive rise in the adoption of residential backup power systems during COVID-19.

LATEST TRENDS

Soaring Technological Development to Create Lucrative Opportunities for Market Expansion

Rising technological advancements in the electronic industry have led to the development of advanced residential backup power systems, which activate automatically when the main power supply stops. Additionally, power backup solutions like the UPS (Uninterruptible Power Supply) protect electronic devices from damage by maintaining the voltage supply when the power supply is high or low and also provide emergency power.

The extensive ongoing research on fuel cells is anticipated to enhance the adoption of fuel cell-powered power backup solutions in residential spaces. Moreover, increasing technological development in hybrid power backup systems, which may run on more than one fuel, is anticipated to be a lucrative opportunity in the forecast period.

Furthermore, manufacturers are combining advanced technology with UPS to more easily access UPS, like IoT-based UPS, which connects with Bluetooth and Wi-Fi. For instance, in November 2021, ZunVolt introduced the mini Wi-Fi UPS for continuous connectivity. ZunVolt mini Wi-Fi has constant Wi-Fi connectivity through routers and modems, even during power cuts. Furthermore, ZunVolt is committed to its customers reaching 5 million homes in 5 years.

Growing Developments in Fuel Cell Technologies to Propel their Adoption in Residential Backup Power

There is a rise in technological developments in fuel cell technologies for backup power applications. Due to a massive decrease in the price of PEM fuel cells, these cells have been adopted for power backup. In 2020, Microsoft announced the use of PEM fuel cells to replace diesel-powered backup generators due to cost-effectiveness and reduced maintenance hours.

While the adoption of fuel cell technologies is low in the residential sector as standby power, the market is slowly developing due to a few innovations. For instance, in March 2018, Home Power Solutions, a Berlin-based German company, launched the Picea micro fuel cell system for home energy supply. The Picea system can be used for space heating and power generation. It can generate 8 kilowatts (kW) of single-phase electricity fed into the domestic grid.

DRIVING FACTORS

Product Demand to Rise on Account of Frequent Power Outages

In several rural and under-development areas such as small towns and villages, regular power issues increase the demand for residential backup power. Furthermore, unexpected power cuts in urban areas due to uncertain weather glitches in transmission and distribution, grid problems, and the power supply continuously raised the product demand.

• In May 2022, in Ontario and Quebec, a derecho with high winds of around 190 km/h caused approximately 1.1 million residents to lose their power; many were still without power after the storm for a week. The total repair cost of all damage caused by thunderstorms was roughly CAD 70 million.

Many companies have launched various power backup products and solutions. For instance, in January 2022, Vertiv launched a compact double-conversion UPS with an inbuilt battery for power backup at home. Furthermore, several companies faced a drastic fall during the COVID-19 pandemic, and to cut-down losses, they provided work from home to their employees. This factor further boosted the market as people required electricity to work from home.

Favorable Government Initiatives on Battery Energy Storage and Fuel Cells to Propel the Market Growth

Encouraging government initiatives introduced by the different authorities to promote low carbon technologies have positively propelled the battery energy storage adoption for residential backup power. Battery Energy Storage systems are increasingly integrated with renewable technologies such as solar & wind power. Consequently, the substantial targets to cut the carbon footprint coupled with aims to boost the green technologies in the primary generation mix will likely add to the industry size.

For instance, the European Union (EU) has set several key targets for 2030 to achieve sustainable development, including at least 40% cuts in greenhouse gas emissions (from 1990 levels) and around 32% share of clean energy in the region’s energy mix. This is anticipated to drive the adoption of renewable energy, especially wind and solar, in the residential sector.

Moreover, according to the Government of India’s Ministry of New and Renewable Energy (MNRE), installations of up to 3 kW of rooftop solar panels are authorized for a grant of 40%. Between 3 kW and 10kW, these installations can get an aid of 20%.

RESTRAINING FACTORS

High Initial and Maintenance Costs to Inhibit the Market Growth

The high initial and maintenance costs of various power backup solutions for homes inhibit the residential backup power market growth.

This is due to the fact that diesel and gasoline-based generators must be serviced after 100-200 uses and require oil changes frequently. Moreover, these generators are extremely noisy, so installation of mufflers is necessary, which adds to the initial cost of generators. Additionally, the cleaning cost is significantly high for gasoline-based generators as gasoline develops a gum-like structure inside the fuel supply line and blocks the generator's flow line, making it difficult for generators to start during winter.

The volatile prices of fuels may also affect the cost of generator operation. Even though lithium-ion batteries are reducing quickly, the initial cost is high for smaller batteries used for energy storage in homes compared to larger-capacity batteries.

Moreover, the lower adoption of residential renewable power generation, as opposed to utility-scale adoption, significantly affects the market. A critical restraining factor for a fuel cell as a power backup is its low technological development for the residential sector. Until recently, no manufacturer was specifically making a fuel cell system for a home. Hence, the systems installed were customized and developed individually, leading to extremely high prices. Further, increasing regulatory framework to cut down on conventional fuel uses is anticipated to affect the demand for power backup solutions such as diesel generators.

SEGMENTATION

By Technology Analysis

Generator Segment to Hold Significant Share Owing to High Adoption

Based on technology, the global market is divided into generator, battery, and fuel cells. The generator segment is the dominant segment in the market due to the high number of available generator options by different companies.

Additionally, the battery segment is anticipated to grow at the highest rate due to the increased adoption of renewable power sources in the residential sector, which utilize batteries to store power. The reduced cost of lithium-ion batteries is anticipated to propel the segment growth.

Currently, fuel cells have a low adoption rate in the residential sector. However, the segment is anticipated to grow at a fast pace owing to technological advancements for backup power.

REGIONAL INSIGHTS

The market has been analyzed across five key regions, North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. Asia Pacific dominated the market in 2021 and is anticipated to be a market leader in the forecast period. The growth in Asia Pacific’s urbanization is expected to enhance the demand for reliable power backup solutions in homes. According to the World Bank, the East Asia and Pacific regions have recorded an annual urbanization rate of 3%, the highest in the world.

North America has recorded a high adoption of power backup solutions in homes. The region has been an early adopter of fuel cell technology for residential power backup by investing in many research projects in the field. The technology partnerships Canada h2 Early Adopters (h2EA) program funded a project to demonstrate hydrogen technologies in power generation and heating in households in Toronto as early as 2010. This investment enabled a confederation led by Fuel Cell Technologies Ltd. (FCT) with Ontario Power Generation Inc. and Toronto at Mississauga (UTM) to authenticate an important step in the transformation toward a hydrogen economy.

The Middle East & Africa region has high reserves of conventional fuels, especially in the GCC countries. The high temperatures and a significant number of power cuts in the region have resulted in the extensive demand for diesel-powered generators. Moreover, Africa has heavily invested in renewable energy to combat power losses in remote areas. This is anticipated to enhance the demand for battery power solutions in homes.

Besides, Europe and Latin America are likely to witness steady growth owing to rising industrial development.

KEY INDUSTRY PLAYERS

Generac is Concentrating on Partnerships and Acquisitions to Strengthen its Presence

The global residential backup power market has many key players delivering a wide range of services and products, such as generators, batteries, and fuel cells, at the local and global levels.

Of these, Generac is expected to account for a significant residential backup power market share owing to its extensive range of product portfolio along with a strong brand value. Furthermore, the company is also focused on enhancing its sales, distribution, and marketing channels through partnerships with local associates to expand its product reach globally. Over the years, the company has partnered with Pramac Group, Motortech, Selmec, Captiva Energy Solutions, Eurio, Pika Energy, Meangreen Mowers, Enbala, Deep Sea Electronics, Chilicon Power, Offgrid Energy, Apricity, Tankutility, and Ecobee.

LIST OF KEY COMPANIES PROFILED:

• ABB (Switzerland)


• Caterpillar Inc. (U.S.)


• Cummins Inc. (U.S.)


• Exide Industries Ltd. (India)


• Kohler Co. (France)


• Panasonic Corp. (Japan)


• PRAMAC (Italy)


• American Honda Motor Company, Inc. (U.S.)


• Schneider Electric (France)


• Tesla (U.S.)


• Trojan Battery Co. LLC (U.S)


• Atlas Copco AB (Sweden)


• Generac Holdings Inc. (U.S.)


• Eaton (Ireland)


• NeoVolta Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• June 2022 – Schneider Electric rolled out two new solar power solutions to facilitate communities with less energy access. The new Homaya Pro inverter converts DC to AC to be connected to a grid or deployed in stand-alone systems.


• April 2022 – Eaton announced that it is constructing a new property for its critical power systems, such as energy storage and UPS, in Vantaa, Finland, incorporating all existing activities into a much larger location. The construction of the plant is expected to be completed by 2023. The 16,500 m² plant will have research and development facilities, manufacturing setups, warehouses, a sales department, and a service plant.


• February 2022 – Eaton announced a partnership with LG Electronics for the provision of flexible load management to be deployed in renewable distributed energy applications. The technology will be incorporated with LG energy management solutions and the LG ThinQ Energy mobile app.


• November 2021 – Panasonic stated the most recent invention in its portfolio of Total Home Energy Solution offerings, the EverVolt 2.0. This technology offers developments for countless customization and has a suitable modular footprint and weatherproof design.


• October 2021 – Generac Power Systems conducted a ceremony for opening its manufacturing, assembly, and distribution facility in Trenton. The investment in a new facility is anticipated to support the augmented national demand for generators for residential purposes. In April 2021, the company witnessed a rise in sales of its residential products, especially standby generators, increasing by 110% over a year ago. This had urged Generac Power Systems to start a Jefferson-based production line and quicken a new plant’s opening in South Carolina.

REPORT COVERAGE

The global residential backup power market report provides a comprehensive assessment of the market and offers valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches are adopted to make meaningful assumptions and views. Further, the report offers detailed market analysis and information as per market segments, helping readers to get an overall market overview. 

REPORT SCOPE & SEGMENTATION