Battery Energy Storage System - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)

The Battery Energy Storage System Market size is estimated at USD 30.63 billion in 2024, and is expected to reach USD 50.70 billion by 2029, growing at a CAGR of 10.61% during the forecast period (2024-2029).

The market was negatively impacted by COVID-19 in 2020. Presently the market reached pre-pandemic levels.

Key Highlights

• Over the medium term, factors such as declining prices of lithium-ion batteries and increased penetration of renewable energy are likely to drive the battery energy storage systems market in the forecast period.
• On the other hand, the demand-supply mismatch of raw materials like cobalt, lithium, copper, etc., will likely hinder the growth of the battery energy storage systems (BESS) market in the studied period.
• Nevertheless, technological advancements in new battery technologies to store energy will likely create lucrative growth opportunities for the BESS market during the forecast period.
• Asia-Pacific is the fastest-growing market during the forecast period due to the rising energy demand. This growth is attributed to increasing investments, coupled with supportive government policies in the countries of this region, including India, China, and Australia.

Battery Energy Storage System Market Trends

Residential Expected to be the Fastest-growing Segment

• Recently, the energy storage system (ESS) experienced significant growth, especially in the residential sector, along with the rising investments in renewable energy infrastructure across the regions.
• Electricity consumption in residential buildings is estimated to increase during the forecast period due to increasing annual disposable incomes and the rising work-from-home trend worldwide. Energy storage systems are used for continuous power supply at homes during power outages at peak hours.
• Various incentive programs initiated by several governments worldwide are in place to support the residential energy storage market. For instance, California's Self-Generation Incentive Program (SGIP) primarily supports the residential storage sector and offers incentives for new and existing distributed energy resources.
• The residential energy storage segment will likely proliferate because of increasing technological advancements in energy storage technology, leading to a decline in battery prices and the widespread deployment of renewable power sources.
• In renewable power sources, the majority of demand in the residential sector comes from the solar energy segment, which, in turn, creates demand for residential battery energy storage systems. For instance, according to France Territoire Solaire, in Q2 2022, France's total residential photovoltaic solar energy capacity accounted for 1,758 MW, an increase of 13.8 % compared to Q2 2021.
• Market players like Harmony Energy Income Trust, an investment firm, announced in November 2022 that its Pillswood project in Yorkshire, United Kingdom, had gone live four months earlier than planned. According to Harmony, the 98MW/196MWh facility is Europe's largest BESS project by MWh. It is enough to power approximately 300,000 UK homes for two hours. The project will provide balancing services to the UK electricity grid network using a Tesla two-hour Megapack. Harmony Energy developed the project, with Tesla overseeing construction. Autobidder, Tesla's algorithmic trading platform, will manage the project.
• In June 2022, Toyota entered the energy storage market by launching the O-Uchi Kyuden System, a residential battery product. Toyota launched a rated output of 5.5 kWh and a rated capacity of 8.7 kWh battery storage system. It uses the company's electric vehicle battery technology. When connected to a photovoltaic rooftop system, the system can power a home day and night. Initially, the company aimed to sell the storage system in Japan.
• Therefore, owing to these factors, the residential application is expected to create lucrative demand in the battery energy storage systems market during the forecast period.

Asia-Pacific Expected to Dominate the Market

• Asia-Pacific is expected to keep leading the market for battery energy storage over the next few years. The region consists of two main types of power grids, each with different characteristics and opportunities for energy storage systems. On one side are highly developed countries like Japan, South Korea, New Zealand, and Australia, as well as other large cities with advanced grids that work well and use the latest technologies.
• The developing regions are also witnessing rapid population growth and urbanization, increasing the electricity demand. Renewable energy is becoming increasingly cost-effective, and developing countries are expected to include huge amounts of renewable energy into their grid. Many areas are expected to adopt a more distributed approach to grid development, using more local power generation and microgrid systems. It is creating the potential for the regional market's growth.
• China's residential energy storage market is expected to grow due to government support and policies. It showed its ability to stimulate high growth in domestic demand for solar-related equipment through subsidies and installation targets.
• Australia is undergoing an energy transformation, expected to intensify over the coming decades. The transformation includes a greater reliance on renewable energy in response to climate mitigation policies.
• In January 2022, Woodside Energy submitted a proposal for a 500 MW solar facility and 400 MWh of battery storage to the Western Australian Environmental Protection Authority. The facility would cover approximately 975.6 hectares within a development envelope of 1,100.3 hectares. According to the proposal, the solar facility will install approximately 1 million solar panels and support infrastructures such as a battery energy storage system and an electrical substation.
• Renewable energy is becoming increasingly cost-effective, and developing countries are expected to include huge amounts of renewable energy into their grid. Many areas are expected to adopt a more distributed approach to grid development, using more local power generation and microgrid systems.
• Therefore, owing to such factors, Asia-Pacific is expected to dominate the market during the forecast period.

Battery Energy Storage System Industry Overview

The battery energy storage system market is fragmented. Some of the major players in the market (in no particular order) are BYD Company Limited, Panasonic Corporation, LG Energy Solution Ltd, Tesla Inc, and Contemporary Amperex Technology Co. Limited.

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