Battery Energy Storage System Market by Battery Type, Offering, Connection Type, Ownership, Energy Capacity, and Application (Residential, Commercial, and Utilities) - Global Forecast to 2030

The Battery Energy Storage System Market is projected to reach $43.7 billion by 2030, at a CAGR of 28.8% during the forecast period 2023–2030. The growth of the battery energy storage system market is driven by government funding for battery energy storage system and the growing benefits of battery energy storage system for EV charging. Moreover, the growing demand for battery energy storage system for commercial applications and the decline in the prices of lithium-ion batteries provide significant opportunities for the key players in the global battery energy storage system market. However, the high capital required for installing battery energy storage system restrains the market's growth to some extent. Additionally, the lack of standardization in storage system and overheating of lithium-ion batteries poses challenges to the growth of the battery energy storage system market.

Growing Benefits of Battery Energy Storage System for EV Charging

According to the International Energy Agency (IEA) (France), the electric cars market is witnessing exponential growth, with over 10 million sales in 2022. Nearly 14% of all new cars sold were electric in 2022, up from around 9% in 2021 and less than 5% in 2020. China was the frontrunner, accounting for around 60% of global electric car sales. More than half of the electric cars on roads worldwide are now in China, and the country has already surpassed its 2025 target for new energy vehicle sales. In Europe, the second largest market, electric car sales increased by over 15% in 2022, meaning that more than one in every five cars sold was electric. Electric car sales in the United States – the third largest market – increased by 55% in 2022, reaching a sales share of 8%.

This increase in popularity has also created the need for more EV charging stations globally. The increased need for EV chargers has raised the question of sustainability. Energy storage system help address this issue effectively. The combination of energy storage with EV chargers creates a cost-effective solution to electric vehicle charging. Companies can integrate energy storage with EV chargers because of benefits such as lower demand charges, faster charging and increased security.

Further, they provide benefits such as avoiding peak-demand charges and making EV charging stations more cost-effective. In a blackout, energy storage offers a separate power source and ensures that drivers can still charge their cars. Due to such benefits, the demand for BESS for EV charging is improving rapidly, supporting the market's growth. Further, companies are taking initiatives to develop battery energy storage system for electric vehicle (EV) charging stations, which supports the growth of the market. For instance, in March 2023, EverCharge, Inc. (U.S.) partnered with PassKey Inc. (U.S.) (subsidiaries of SK Group) (South Korea) to develop a battery energy storage system (BESS) to supplement EverCharge’s electric vehicle charging stations. The new BESS developed by Passkey and EverCharge will be used to consolidate power during off-peak hours and deploy the energy via EV charging stations during periods of high demand. By combining EV charging with battery storage to mitigate demand peaks, sites can benefit from lower operating costs and additional energy resiliency.

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Key Findings in the Battery Energy Storage System Market Study:

The Lithium-ion Batteries Segment to Register the Highest CAGR During the Forecast Period

Based on battery type, the global battery energy storage system market is segmented into lithium-ion batteries, nickel-cadmium (Ni-Cd) batteries, nickel-metal hydride (Ni-MH) batteries, sodium-sulfur (Na-S) batteries, redox flow battery, and other batteries. The lithium-ion batteries segment is expected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the growing demand for BESS with long cycle & extended shelf life and the growing need for high specific energy and high load capabilities with power cells. 

The Services Segment to Register the Highest CAGR During the Forecast Period

Based on offering, the global battery energy storage system market is segmented into components and services. The services segment is expected to register the highest CAGR during the forecast period. The growth of this segment is driven by the growing demand for support, integration, and consulting services for BESS, the increasing need for support services to help improve the quality, availability, and supply continuity of hardware components, and the increasing need to resolve issues associated with software and improve operational efficiency.

The On-grid Connection Segment to Register the Highest CAGR During the Forecast Period

Based on connection type, the global battery energy storage system market is segmented into on-grid and off-grid connections. The on-grid connection segment is expected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the growing demand for high power consumption and the increasing need to store and access vast amounts of energy for utility-scale applications.  

The Utility-owned Segment to Register the Highest CAGR During the Forecast Period

Based on ownership, the global battery energy storage system market is segmented into customer-owned, third-party-owned, and utility-owned. The utility-owned segment is expected to register the highest CAGR during the forecast period. The growth of this segment is driven by the increasing demand for utility-scale ancillary services and the growing need to deliver peak loads to consumers through ESS instead of extending power lines and transformers.

The More than 500 MWh Segment to Register the Highest CAGR During the Forecast Period

Based on energy capacity, the global battery energy storage system market is segmented into below 100 MWh, 100 MWh to 500 MWh, and more than 500 MWh. The more than 500 MWh segment is expected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the growing popularity of benefits such as smart energy consumption, cost-cutting, resilience, resource-saving, environmental efficiency, and the availability of unique features such as pollution-free operations and instantaneous response by BESS.

The Utilities Segment to Register the Highest CAGR During the Forecast Period

Based on application, the global battery energy storage system market is segmented into residential, commercial, and utilities. The utilities segment is expected to register the highest CAGR during the forecast period. The growth of this segment is attributed to the initiatives taken by companies to launch flow batteries for meeting the environmental, longevity, and safety objectives of utilities and the growing usage of BESS for peak shaving, load shifting, black start, microgrids, renewable integration, and grid service applications.

Asia-Pacific to be the Fastest-growing Regional Market

Based on geography, the battery energy storage system market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. Asia-Pacific is expected to register the highest CAGR during the forecast period. The growth of this market is attributed to the presence of prominent players offering advanced BESS components & services and residential energy storage technology, government policies to improve the reliability and quality of the power distribution facilities to the residential customers, and access to electricity for remote and island communities. Furthermore, the lower technology costs and increased technological advancement across the region encourage consumers to install battery energy storage system.

Key Players

The report includes a competitive landscape based on an extensive assessment of the key growth strategies adopted by the leading market participants in the battery energy storage system market in the last 3–4 years. The key players profiled in the battery energy storage system market report are General Electric Company (U.S.), ABB Ltd. (Switzerland), Panasonic Life Solutions India Pvt. Ltd. (India) (A Part of Panasonic Holdings Corporation), Siemens AG (Germany), JinkoSolar Holding Co., Ltd. (China), Honeywell International Inc. (U.S.), Tesla Inc. (U.S.), Toshiba Corporation (Japan), Johnson Controls International plc (Ireland), NEC Corporation (Japan), Delta Electronics, Inc. (Taiwan), Sensata Technologies, Inc. (U.S.), Fluence Energy, Inc. (U.S.), Nextera Energy, Inc. (U.S.), Beacon Power, LLC (U.S.), and Urja Solutions (India).

Scope of the report:

Battery Energy Storage System Market Assessment, by Battery Type    

• Lithium-ion Batteries             
• Sodium-sulfur (Na-S) Batteries
• Nickel-cadmium (Ni-Cd) Batteries         
• Redox Flow Batteries (RFB)   
• Nickel-metal Hydride (Ni-MH) Batteries
• Other Battery Types

Battery Energy Storage System Market Assessment, by Offering           

• Components          
  • Battery system            
  • Power Conversion system           
  • Energy Management system       
  • Heating, Ventilation, and Air Conditioning     
  • Supervisory Control and Data Acquisition      
  • Battery Management system       
  • Other Components         
• Services 

Battery Energy Storage System Market Assessment, by Connection Type                             

• On-grid Connection
• Off-grid Connection

Battery Energy Storage System Market Assessment, by Ownership                       

• Third-party-owned  
• Customer-owned   
• Utility-owned          

Battery Energy Storage System Market Assessment, by Energy Capacity                              

• Below 100 MWh      
• 100 MWh to 500 MWh            
• More than 500 MWh                

Battery Energy Storage System Market, by Application                          

• Utilities  
  • Black Start             
  • Microgrids             
  • Renewable Integration           
  • Peak Shaving          
  • Load Shifting          
  • Grid Services          
• Residential             
• Commercial           
  • Industries
  • EV Charging Infrastructure    
  • Data Centers          
  • Marine    
  • Telecommunications             
  • Healthcare             

Battery Energy Storage System Market Assessment, by Geography       

• North America        
  • U.S. 
  • Canada           
• Europe    
  • Germany         
  • U.K.
  • France            
  • Italy
  • Spain                              
  • Rest of Europe
• Asia-Pacific           
  • China              
  • India
  • South Korea   
  • Japan                             
  • Rest of Asia-Pacific       
• Latin America        
  • Brazil              
  • Mexico           
  • Rest of Latin America    
• Middle East & Africa
  • UAE
  • Israel              
  • Rest of the Middle East & Africa

Key Questions Answered in the Report: