Report Description

Forecast Period

2024-2028

Market Size (2022)

USD 3.25 Billion

CAGR (2023-2028)

6.25%

Fastest Growing Segment

Solar

Largest Market

Europe

 




Market Overview

Global Commercial Energy Storage Market has valued at USD 3.25 Billion in 2022 and is anticipated to project robust growth in the forecast period with a CAGR of 6.25% through 2028. The global Commercial energy storage market refers to the industry segment that involves the development, manufacturing, distribution, and deployment of energy storage systems designed specifically for Commercial properties. These systems are intended to store excess energy generated from renewable sources, such as solar panels, wind turbines, or other clean energy technologies, for later use. By capturing and storing surplus energy, homeowners can optimize their energy consumption, reduce reliance on the grid, and increase their energy independence. Commercial energy storage systems are composed of battery technologies, control systems, and monitoring tools that enable homeowners to manage and utilize stored energy efficiently.

In essence, the global Commercial energy storage market encompasses the range of products and services aimed at empowering homeowners to harness, store, and manage energy at the household level. This market is driven by the increasing adoption of renewable energy sources, the desire for energy cost savings, grid stability enhancement, and the growing interest in achieving sustainability and resilience in Commercial energy consumption. As the world transitions toward cleaner and more sustainable energy solutions, Commercial energy storage systems play a crucial role in facilitating the integration of renewable energy into everyday life while providing homeowners with greater control over their energy usage.

Key Market Drivers

Battery Energy Storage Systems Regulate Voltage and Frequency Help in Market Growth

Battery energy storage is a critical technology in transitioning to a sustainable energy system. The battery energy storage systems regulate voltage and frequency, reduce peak demand charges, integrate renewable sources, and provide a backup power supply. Batteries are crucial in energy storage systems and are responsible for around 60% of the system's total cost. However, batteries are expected to account for only a small portion of the total installed storage capacity. Various types of batteries used in energy storage systems are lithium-ion, lead-acid, nickel-metal hydride (NiMH), nickel-cadmium (NiCD), nickel-zinc (NiZn), and flow batteries, among others. Due to their declining prices, lithium-ion batteries are witnessing a massive demand in the battery energy storage market. The United States Department of Energy (DOE) announced an interim price target of USD 123/kWh by 2022, and the costs for lithium-ion batteries are estimated to fall to as low as USD 73/kWh by 2030.

Lithium-ion batteries are also expected to hold the most significant share of the battery energy storage market. They require little maintenance, are lightweight, have a reliable cycle life, and have high energy density regarding the volume and high charge/discharge efficiency. Although most batteries in the energy storage market are lead-acid, other battery chemistries, such as lithium-ion (Li-ion), sodium, and flow batteries, are expected to provide additional benefits, such as increased durability or higher energy capacity for longer-term storage or other specific applications. Further, the battery energy storage systems use utility grids to supply electricity to consumers, which also reduces energy bills. Besides, the battery energy storage systems used in utilities are a cost-effective alternative to conventional infrastructure, especially in helping substations and transmission and distribution (T&D) lines to meet the increasing demand. These factors are contributing to the growth of the battery energy storage system market.

Utilities are still the most significant segment of the battery energy storage market. More utilities include storage in their solicitations for solar projects, increasing the opportunities for battery energy storage systems during the forecast period. Furthermore, combining big batteries with renewable energy projects improves reliability without creating greenhouse gas (GHG) emissions. Therefore, homeowners and businesses increasingly focus on using batteries for backup power and capturing the excess energy from rooftop systems whenever required. So far, battery storage deployment has been concentrated in some developed economies in North America, East Asia-Pacific, Europe, and Central Asia. The increasing levels of renewable penetration and aging grid infrastructure are the major factors driving the growing deployment of battery energy storage in these regions.

By 2027, India aims to have 275 GW of total wind and solar capacity, plus 72 GW of hydro and 15 GW of nuclear. Renewable energy’s share of installed capacity is forecast to rise to 43% by 2027. With the growing renewable sector, the demand for energy storage systems to address the challenges related to intermittency in renewable power generation is expected to grow. Also, the 8th Basic Plan for Electricity Supply and Demand, which was released in 2017, said that the South Korean government expected electricity demand to grow by only 1% per year through 2030. The government wants to cut its greenhouse gas emissions and fine dust pollution by using ESS and other ways to save energy and using cleaner energy from renewable energy sources. Further, in 2021, China announced its plan to boost cumulatively installed non-pumped hydro energy storage to around 30 GW by 2025 and 100 GW by 2030, which, coupled with recent adoptions of time-of-use power tariffs that create a greater range between peak and off-peak power prices, are driving a boom in battery storage activity.

India's plans to diversify its energy sources and provide electricity to everyone 24 hours a day, 7 days a week by adding a lot of renewable energy generation capacity could be a big driver for the market that was studied.During the forecast period, the market studied is also expected to be helped by the growing need for electricity, the rise in disposable income, and the need for a reliable power supply. By 2023, all existing homes and businesses in China will have to have a solar PV system installed on the roof. Under a government rule, a certain number of buildings will have to have solar PV systems installed. The government buildings (no fewer than 50%), the public structures (40%), the Commercial buildings (30%), and the rural buildings (20%) across about 676 counties will need to have solar PV rooftop systems.