Battery Energy Storage Systems Market

Global Battery Energy Storage Systems Market Size (2024 to 2032):

The size of the global battery energy storage systems market was worth USD 27.67 billion in 2023. The global market is anticipated to grow at a CAGR of 10.60% from 2024 to 2032 and be worth USD 68.52 billion by 2032 from USD 30.60 billion in 2024. 

Current Scenario of the Global Battery Energy Storage Systems Market

In recent years, the global market for battery energy storage systems (BESS) has experienced promising growth and is expected to continue the trend during the forecast period. The global shift towards renewable energy, technological advancements, and the increasing need for grid stability and energy efficiency have fuelled the demand for battery energy storage systems in the past, and these factors are expected to continue to propel the global market growth during the forecast period. Countries such as the United States, China, Germany, and Australia are the early adopters of battery energy storage systems and are leading the way in the global market. Among these countries, the U.S. and China are projected to showcase strong growth during the forecast period owing to the increasing support from governments and substantial investments in renewable energy projects. Companies that operate in the BESS market have been considering strategies such as investing in R&D, strategic partnerships, and acquisitions primarily. In the recent past, it has been noticed companies are investing considerably in R&D activities to develop advanced batteries, such as lithium-ion and solid-state batteries, that offer higher energy densities and longer life cycles.

MARKET DRIVERS

The rising demand for renewable energy integration primarily boosts the global battery energy storage systems market.

The shift towards renewable energy sources, such as solar and wind can be noticed happening worldwide and resulting in the increasing demand for battery energy storage systems (BESS). For instance, renewable energy accounted for 29% of the global electricity generation in 2023, which was 24% in 2018. This indicates that the occupancy of renewable energy in global electricity generation is gradually growing, and at the same rate, the demand for BESS is growing. Renewable energy generation happens on an intermittent basis, which is why the BESS is important, as these systems store excess energy and provide a reliable power supply when renewable sources are not producing.

An increase in the number of product launches by the market participants is propelling the global battery energy storage systems market. The key market players have been investing significant amounts and putting rigorous efforts into launching technologically upgraded BESS products in the market. For instance, in 2021, ENerpack was introduced by the Jackson Group as an innovation to mitigate climate change and provide a continuous supply of green power. To meet the growing demand for renewable energy sources, adoption creates the continuous need for the launch of new battery energy storage systems in the market. Battery energy storage systems are an ideal solution for enabling renewable energy storage sources to integrate into the grid and decrease the dependency on non-renewable fossil fuel energy sources.

Y-o-Y growth in demand for the grid energy storage system is further contributing to the growth of the global battery energy storage systems market. Solar and wind energy are the most prominent renewable storage energy used in the storage grid. Variations can be seen in the process of energy generation due to the concealing of the sun by the clouds and varying wind currents. This results in the increased demand for flexible grid systems to store energy. The grid modernization contains the battery energy storage systems as an integral part. The battery energy storage systems help the grid operators to store energy when there is excess supply. With respect to electricity supply systems, the grid energy storage systems will provide reliability and flexibility in terms of electricity generation, transmission, and distribution.

Furthermore, factors such as advancements in battery technology, declining costs of lithium-ion batteries, favorable schemes and initiatives by the governments of several countries, and growing energy consumption are contributing to the expansion of the global BESS market. Y-o-Y growth in the decentralized energy systems, favorable regulatory environment for BESS, increasing emphasis on reducing carbon emissions, and rapid expansion of smart grid technologies are aiding the global market growth. The growing number of investments in renewable energy projects worldwide, the rising usage of BESS in industrial applications and increasing demand for backup power solutions are favouring the growth of the global market.

MARKET RESTRAINTS

The high costs associated with BESS primarily hamper global market growth.

The high upfront cost of buying and installing battery energy storage systems limits their adoption among small companies. Technological complexities with using BESS are further hindering the growth rate of the global market. There are technical challenges that need to be overcome as the development of the battery energy storage systems is still in the initial stage. This results in the slowdown of demand in the market. Lack of standardization in the battery energy storage market is a restraint for the companies to compare products and find difficulty in making purchasing decisions. This can limit the purchasing demand for battery energy storage systems. The overall restraints faced by the battery energy storage systems market limit the market growth and development.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Battery Energy Storage Systems Market Analysis By Type

The lithium-ion batteries segment dominated the market in 2023 and is expected to be the fastest-growing segment in the worldwide BESS market during the forecast period. The lithium-ion batteries segment accounted for 70.9% of the global market share in 2023. The domination of the lithium-ion batteries segment in the global market is majorly credited to their high energy density, long cycle life, and decreasing cost per kilowatt-hour. The growing number of investments by the key market participants to increase the production capacity and R&D are further contributing to the expansion of the lithium-ion batteries segment in the global market. For instance, Tesla Inc. announced their plans to build a gigafactory in China to manufacture their energy storage product called Megapack in April 2023. Tesla also built their first such factory in China in 2019. On the other hand, the European Commission invested an amount of €3.2 billion (US$3.53 billion) in 2019 in research and manufacturing of lithium-ion battery projects to reduce the dependency on imports.

Global Battery Energy Storage Systems Market Analysis By Ownership

The utility-owned segment led the market with 48.4% of the global market share in 2023 and is expected to maintain a healthy CAGR during the forecast period. The rapid integration of renewable energy sources into the grid, the increasing need for grid stabilization, and regulatory incentives for reducing carbon emissions are some of the key factors propelling the growth of the utility-owned segment in the global market. For instance, as part of the REPowerEU plan, the European Union allotted significant funds to improve energy storage capacities and ensure energy security. On the other hand, the Chinese government has set targets to promote the storage capacity to support their renewable energy goals and deploy grid-scale battery projects at a rapid scale. Such initiatives and measures from the authorities and governments are anticipated to fuel the demand for battery energy storage systems and contribute to the segmental expansion.

The third-party-owned segment is expected to witness a promising CAGR during the forecast period owing to the rising popularity of energy-as-a-service (EaaS) models and power purchase agreements (PPAs), which lower the upfront cost barriers for end-users.

Global Battery Energy Storage Systems Market Analysis By Connection Type

The on-grid connection segment dominated the market and captured 70.9% of the worldwide market share in 2023. The growth of the on-grid connection segment is majorly fuelled by the growing application of on-grid connection in stabilizing power grids and integrating renewable energy sources and increasing demand for renewable energy integration. Factors such as initiatives from governments to promote grid modernization and the rising need for enhanced energy security are contributing to the expansion of the on-grid connection segment in the global market. For instance, initiatives such as the Clean Energy Package by the European Union and Grid Modernization by the U.S. Department of Energy have driven a substantial number of investments in on-grid energy storage.

However, the off-grid connection segment is anticipated to grow at a notable CAGR in the global market during the forecast period.

Global Battery Energy Storage Systems Market Analysis By Application

The residential segment is estimated to grow at the fastest CAGR during the forecast period in the global market by application. Factors such as the growing adoption of solar PV systems and the desire to have energy independence among homeowners are primarily driving the growth of the residential segment in the worldwide market. The declining costs of battery technologies, government incentives, and rising awareness of climate change are further supporting the growth rate of the residential segment in the global market.

REGIONAL ANALYSIS

The Asia-Pacific had the leading share of the global BESS market in 2023 and is likely to remain dominant throughout the forecast period. Factors such as rapid urbanization, industrialization, increasing need for reliable and resilient power infrastructure, and initiatives from the governments of Asia-Pacific countries to promote energy storage deployment and address air pollution concerns are primarily driving the battery energy storage systems market in the Asia-Pacific market. In this region, China, India, Japan, South Korea, and Australia have been investing heavily in BESS to support their energy transition goals and enhance grid reliability.

North America is another major regional segment in the global BESS market and is expected to account for a substantial share of the global market during the forecast period. North America has a favorable regulatory environment for battery management storage systems. In the recent past, regulatory frameworks such as the Investment Tax Credit (ITC) and state-level incentives have brought several investments in grid modernization and renewable integration projects in North America, which has contributed to the fuelling of the demand for BESS in this region. 

Europe is predicted to register a prominent CAGR in the global market during the forecast period. Europe has set renewable energy targets and quickly progressing in the transition towards a low-carbon economy. Europe acts like a hub for automotive companies. An increase in the collaborations between energy companies and automotive companies to repurpose batteries of electric vehicles for stationary storage applications is propelling the Europe BESS market growth. The rise of virtual power plants and demand response programs in Europe is further contributing to the regional market expansion.

KEY PLAYERS IN THE GLOBAL BATTERY ENERGY STORAGE SYSTEMS MARKET

Companies playing a major role in the global battery energy storage systems market include AES Corporation, BYD Company, Contemporary Amperex Technology, General Electric Hitachi, Ltd., LG Energy Solutions CO., Ltd., NEC Energy Solutions, Samsung SDI, Siemens AG, Sunverge Energy, Tesla Inc. and Toshiba Corporation.

RECENT HAPPENINGS IN THE GLOBAL BATTERY ENERGY STORAGE SYSTEMS MARKET

• In March 2024, Prevalon Energy, a company belonging to Mitsubishi Power Americas, joined Idaho Power for Integrated BESS on a durable long-term service contract.
• In 2022, Vistra announced a plan to build the Moss Landing Energy storage facility. A 15-year asset adequacy agreement is agreed upon by the Pacific Gas and Electric Company (PG&E) for an innovative 350 MW battery system. This will be added to the existing 400MW power storage capacity.
• In 2021, Samsung SDI CO., Ltd. launched PRiMX, a new battery brand in Korea and Europe, and it is soon to launch in the U.S.

DETAILED SEGMENTATION OF THE GLOBAL BATTERY ENERGY STORAGE SYSTEMS MARKET INCLUDED IN THIS REPORT

This research report on the global battery energy storage systems market has been segmented and sub-segmented based on element, battery, ownership, connection, application, and region.

By Type

• Lithium-Ion Batteries
• Sodium–Sulfur Batteries
• Flow Batteries
• Advanced Lead-Acid Batteries
• Others

By Ownership

• Utility Owned
• Customer Owned
• Third-Party Owned

By Connection Type

• On-Grid Connection
• Off-Grid Connection

By Application

• Residential
• Non-Residential
• Utilities
• Other Applications

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa