battery cells and packs, and of the inverters, housing, and other essential components in the balance of system. By our estimate, the providers in this part of the chain will receive roughly half of the BESS market profit pool. Then there are the system integration activities, including the overall design and development of energy management systems and other software to make BESS more flexible and useful. We expect these integrators to get another 25 to 30 percent of the available profit pool. Finally, between 10 and 20 percent of the profit pool is associated with sales entities, project development organizations, other customer acquisition activities, and commissioning (Exhibit 4).
systems. Tailored products will help residential customers achieve goals such as self-sufficiency, optimized self-consumption, and lower peak power consumption—and they may mean higher margins in this sector. Our recent consumer survey on alternative energy purchases suggests that interest in a BESS product will come down to a few factors, starting with price, safety, and ease of installation (Exhibit 3).
How might we think about our strategic positioning?
In a new market like this, it’s important to have a sense of the potential revenues and margins associated with the different products and services. The BESS value chain starts with manufacturers of storage components, including
Exhibit 3 Price, performance, safety, and good warranties top the list of what home buyers seek in a battery energy storage system.
2023 BESS 1 Germany Customer Survey, perceived as most important, % of respondents
Key buying factors
Price and performance
34
Safety and warranty
19
Ease and cost of installation or delivery lead time Supplier brand or local engineering Servicing and maintenance Software capabilities and o…erings Sustainability footprint of the system Space requirements and volume of the system
14
10
7
6
5
5
1 Battery energy storage system. Source: McKinsey BESS Customer Survey, 2023, German market (n = 300)
McKinsey & Company
Accelerating the journey to net zero
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