"Actionable Insights to Fuel Your Growth"
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.
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.
Request a Free sample to learn more about this report.
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.
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.
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%.
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.
To know how our report can help streamline your business, Speak to Analyst
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.
Asia Pacific Residential Backup Power Market Size, 2021 (USD Billion)
To get more information on the regional analysis of this market, Request a Free sample
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.
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.
An Infographic Representation of Residential Backup Power Market
To get information on various segments, share your queries with us
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.
Value (USD Billion)
Fortune Business Insights says that the global industry size was USD 9.51 billion in 2021 and is projected to reach USD 17.28 billion by 2029.
In 2021, the Asia Pacific market value stood at USD 3.34 billion.
Registering a CAGR of 7.6%, the market will exhibit steady growth over the forecast period (2022-2029).
The generator segment is anticipated to hold a significant share across all technologies and will dominate the market during the forecast period.
Increasing urbanization across regions is the key factor driving the market growth.
Generac Holdings Inc., Caterpillar Inc., and American Honda Motor Company, Inc. are the key participants operating in this market.
Asia Pacific dominated the market in terms of share in 2021.
The technological development in power backup technologies with increased integration with IoT interfaces has escalated the adoption of these technologies in the residential sector. The rise of adoption of these devices is anticipated to drive the market.
“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”- One of the Leading Food Companies in Germany
“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”- Intuitive Surgical
“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”- Major Food Company in Japan
“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”- Ziering Medical
“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”- Major Manufacturer of Precision Machine Parts in India
“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”- Hewlett-Packard
“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”- Global Management Consulting Firm
“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”- UK-based Start-up in the Medical Devices Sector
“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”- One of the Largest Companies in the Defence Industry