The battery energy storage system market is expected to register a CAGR of over 16% during the forecast period. With restrictions and lockdowns imposed, major countries observed a sudden decline in the sales of electric vehicles (EV) and the temporary shutdown of industrial activities, which resulted in an economic fallout, especially during H1 2020. Furthermore, in 2020, the energy storage producers and EV manufacturers experienced a significant fall in H1 2020 as compared to the previous year in 2019, which stalled the market growth of the North America and Europe energy storage industry till H1 2020 due to the COVID-19 outbreak. For instance, BYD Co. Ltd witnessed a sharp decline in sales by more than 35% in Q1 2020 when compared to that of Q1 2019. The major factors driving the market studied are the increasing levels of renewable penetration, demand for reliable and uninterrupted power supply, and aging grid infrastructure. However, the high initial investment required for the installation of the energy storage system, along with limited resources of raw materials required for battery systems, are expected to hinder the growth of the market studied.
- The residential segment is expected to be the fastest-growing segment of the battery energy storage system market.
- The commercial and industrial (C&I) sector is far more sensitive to power outages than the residential sector, and thereby the increase in reliability and decrease in the cost of battery energy storage system is expected to propel the adoption by the commercial and industrial sector, creating an opportunity for the growth of the market during the forecast period.
- Asia-Pacific is expected to dominate the market growth across the world, with the most consumption from countries such as China and Australia.
Key Market Trends
Residential Expected to be the Fastest-growing Segment
- In the recent past, 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 across the world. Energy storage systems are used for continuous power supply at homes during power outages at peak hours.
- Furthermore, various incentive programs initiated by several governments across the world 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 the program offers incentives to new and existing distributed energy resources.
- Moreover, the residential energy storage segment is likely to proliferate because of increasing technological advancements in energy storage technology, which is leading to a decline in battery prices and widespread deployment of renewable power sources.
- In June 2021, Q CELLS partnered with eStat Inc., a clean energy solutions provider in the residential energy sector, to expand its presence in the Hawaiian residential energy market. eStat's cloud-based energy optimization and management technology allow homeowners to build a sustainable Zero Carbon Smart Home that achieves NEM-equivalent savings in Hawaii.
- Therefore, owing to the above points, the residential application is expected to be the fastest-growing segment in the battery energy storage systems market during the forecast period.
Asia-Pacific Expected to Dominate the Market
- The Asia-Pacific region consists of two main types of power grids, each with different characteristics and opportunities for energy storage systems. On the one side are highly developed countries, such as Japan and South Korea, with advanced grids that operate reliably and utilize advanced technologies. On the other side, there are nations that are still developing and have unreliable or limited power grids.
- The developing regions are also witnessing rapid population growth and urbanization, which is increasing the demand for electricity. Renewable energy is becoming increasingly cost-effective, and developing countries are expected to include huge amounts of renewable energy into their grid. Also, many areas are expected to adopt a more distributed approach to grid development, using more local power generation and microgrid systems and thereby creating a potential for growth of the battery energy storage system market in the region.
- China's residential energy storage market is expected to grow on the back of government support and policies. It has shown its ability to stimulate high growth in domestic demand for solar-related equipment through subsidies and installation targets.
- Australia is undergoing an energy transformation, which is 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 a 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 see the installation of approximately 1 million solar panels, along with supporting 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. Also, many areas are expected to adopt a more distributed approach to grid development, using more local power generation and microgrid systems.
- Therefore, owing to the above points, Asia-Pacific is expected to dominate the market during the forecast period.
The battery energy storage system market is fragmented. The major companies include BYD Company Limited, Panasonic Corporation, LG Energy Solution Ltd, and Contemporary Amperex Technology Co. Limited.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
TABLE OF CONTENTS
- 1.1 Scope of the Study
- 1.2 Market Definition
- 1.3 Study Assumptions
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET OVERVIEW
- 4.1 Introduction
- 4.2 Market Size and Demand Forecast in USD billion, until 2027
- 4.3 Recent Trends and Developments
- 4.4 Government Policies and Regulations
- 4.5 Market Dynamics
- 4.5.1 Drivers
- 4.5.2 Restraints
- 4.6 Supply Chain Analysis
- 4.7 Porter's Five Forces Analysis
- 4.7.1 Bargaining Power of Suppliers
- 4.7.2 Bargaining Power of Consumers
- 4.7.3 Threat of New Entrants
- 4.7.4 Threat of Substitutes Products and Services
- 4.7.5 Intensity of Competitive Rivalry
5 MARKET SEGMENTATION
- 5.1 Type
- 5.1.1 Lithium-ion Batteries
- 5.1.2 Lead-acid Batteries
- 5.1.3 Nickel Metal Hydride
- 5.1.4 Other Types (Sodium-sulfur Batteries and Flow Batteries)
- 5.2 Application
- 5.2.1 Residential
- 5.2.2 Commercial and Industrial
- 5.3 Geography
- 5.3.1 North America
- 5.3.2 Europe
- 5.3.3 Asia-Pacific
- 5.3.4 South America
- 5.3.5 Middle-East and Africa
6 COMPETITIVE LANDSCAPE
- 6.1 Mergers and Acquisitions, Joint Ventures, Collaborations, and Agreements
- 6.2 Strategies Adopted by Leading Players
- 6.3 Market Share Analysis
- 6.4 Company Profiles
- 6.4.1 BYD Company Limited
- 6.4.2 Panasonic Corporation
- 6.4.3 LG Energy Solution Ltd
- 6.4.4 Contemporary Amperex Technology Co. Limited
- 6.4.5 Sony Corp.
- 6.4.6 Varta AG
- 6.4.7 Tesla Inc.
- 6.4.8 Samsung SDI Co. Ltd
- 6.4.9 Cellcube Energy Storage System Inc.
7 MARKET OPPORTUNITIES AND FUTURE TRENDS