By Vera Eckert

BERLIN (Reuters) - Solarwatt, a German manufacturer of batteries that store power generated by domestic solar panels, expects revenue to grow 40 percent this year as sales more than double, Chief Executive Detlef Neuhaus told Reuters in an interview.

Battery sales of Solarwatt's MyReserve brand in 2017 could reach 5,000 units after it sold 2,000 in 2016, Neuhaus said on Tuesday. He expects revenue of 90 million euros ($96.80 million) this year, after 30 percent growth last year.

Most of the batteries will be sold in Germany, and the rest in France, Italy, Spain, Benelux, Britain and Australia.


But industry projections for total 2016 sales of 40,000 to 50,000 in Germany had proved optimistic, because of uncertainty over small state incentive payments, which were extended but created bureaucracy, and consumers hesitating before taking the decision to spend thousands of euros on a new gadget.

"We estimate the German market at a size of 20,000 to 25,000, where we have achieved a market share of between 7 and 10 percent, which is very pleasing," Neuhaus said.

Last year, Solarwatt linked up with giant utility E.ON in a project combining the Dresden-based firm's technical expertise in photovoltaics and batteries with the retail market access and commodity trading experience of a traditional energy supplier.

This is not an exclusive partnership, rather a sideline for Solarwatt, which mainly sells via tied tradesmen, while for E.ON it means testing a potential long-term partner.

"We will remain partners this year, then we'll give each other feedback and decide how to proceed," Neuhaus said.

E.ON, which has six million households as customers, sells Solarwatt products under its Aura brand.

The battery maker is not yet profitable. Neuhaus said it was the intention of its main owner, BMW heir Stefan Quandt, to create a long-term business, involving heavy early investment in brain power.

With batteries, Germany's 1.5 million small solar operators could eventually become independent of central power suppliers and sell surplus power to the grid, which will accelerate when a generous 20-year subsidy scheme starts fading from 2020.

There is economic pressure to buy batteries because bought-in power is expensive.

Other contenders vying for market share include Bavaria-based sonnen GmbH, Varta Microbattery, South Korea's LG Chem and U.S. company Tesla.

(Editing by Susan Thomas)

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