Battery Energy Storage System Market Report 2025

The battery energy storage system market size has grown exponentially in recent years. It will grow from $6.89 billion in 2024 to $8.68 billion in 2025 at a compound annual growth rate (CAGR) of 26%. The growth in the historic period can be attributed to renewable energy integration, declining battery costs, energy independence, government incentives, electric vehicle growth, demand response programs.

The battery energy storage system market size is expected to see exponential growth in the next few years. It will grow to $20.76 billion in 2029 at a compound annual growth rate (CAGR) of 24.3%. The growth in the forecast period can be attributed to renewable capacity expansion, decentralized energy systems, resilience planning, transition to electric mobility, energy storage mandates. Major trends in the forecast period include grid resilience and reliability, energy management systems (EMS), hybrid energy storage systems, microgrid development, innovation in battery technologies.

The ongoing renewable energy revolution is anticipated to drive the growth of the battery energy storage system (BESS) market in the future. Renewable energy is derived from natural resources that replenish more quickly than they are consumed. Its increasing utilization helps reduce emissions of pollutants and greenhouse gases that contribute to climate change. In the context of BESS, energy is captured from the electrical grid or renewable sources like solar and wind and stored using battery storage technology. For example, in February 2024, reports from the World Resources Institute, a U.S.-based research organization, indicated that a record 31 GW of solar energy capacity was installed in 2023, reflecting a 55% increase from 2022. This brought the total installed solar capacity to around 161 GW, supplying approximately 5% of the nation’s electricity. Therefore, the growing demand for clean and renewable energy is expected to significantly boost the battery energy storage system market.

The anticipated surge in the adoption of electric vehicles (EVs) is poised to drive the expansion of the energy storage system market in the coming years. Electric vehicles, powered by electric motors and relying on energy stored in batteries or other storage devices, depend on Battery Energy Storage Systems (BESS) as the primary power source. These high-capacity batteries store electrical energy, typically obtained from charging stations or regenerative braking, and release it to the electric motor, eliminating the need for traditional internal combustion engines. This transition reduces reliance on fossil fuels and minimizes emissions. According to the Global Electric Vehicle Outlook report from the International Energy Agency (IEA) in May 2022, electric vehicle sales doubled in 2021 compared to 2020, reaching approximately 6.6 million units. Notably, the first quarter of 2022 witnessed a further increase, with 2 million electric cars sold globally. The accelerated adoption of electric vehicles stands as a key driver propelling the growth of the battery energy storage system market.

The battery energy storage system market is witnessing a prominent trend in the form of technological advancements, with major companies dedicating efforts to enhance the efficiency of these systems. In January 2022, Franklin Whole Home, a privately funded cleantech company based in the United States, introduced an innovative integrated battery and control system leveraging artificial intelligence technology. The Franklin Home Power solution stands out by combining lithium iron phosphate with aGate smart control technology, resulting in a distinctive and improved storage solution. The aGate control system incorporates adaptive learning algorithms, enabling it to effectively manage even the most complex load circumstances. This strategic focus on technological innovation reflects the commitment of major players to advance the capabilities of battery energy storage systems for greater efficiency and effectiveness in meeting evolving market demands.

Major companies in the battery energy storage system market are creating new products, such as integrated energy storage system solutions, to achieve a competitive advantage. Integrated Energy Storage Systems (ESS) encompass comprehensive solutions that merge various components and technologies into a single system for storing electrical energy. For example, in November 2023, Caterpillar Inc., a U.S.-based engineering equipment manufacturing firm, introduced the Cat ESS suite, an integrated Energy Storage System (ESS) solution. This suite features scalable and modular designs suitable for diverse energy system applications, including generator set transient assist, grid integration and support, energy time-shifting, power stabilization, power factor correction, and renewable energy integration. The standard module, which serves as the basic unit, is a 20-foot module equipped with lithium-ion batteries, Caterpillar's bi-directional inverter, and an isolation transformer. The Cat ESS suite is designed to provide customers with grid stabilization and energy time-shifting technologies to support site loads with scalability.

In February 2022, LG Energy Solution, a prominent South Korea-based battery company, successfully acquired NEC Energy Solutions for an undisclosed amount. This strategic acquisition provides LG Energy Solution with access to both the operational data and technology of NEC Energy Solutions. Consequently, the integration of these assets is expected to enhance system-level performance and reliability, facilitating easier monitoring and data collection from inverters and other Power Conversion System (PCS) components. NEC Energy Solutions, based in the US, is known for providing energy storage solutions and battery systems.

Major companies operating in the battery energy storage system market include BYD Company Limited, TotalEnergies SE, Huawei Technologies Co. Ltd., Hitachi Ltd., Tesla Inc., General Electric Company, Siemens AG, Panasonic Corporation, Contemporary Amperex Technology Co. Limited, LG Chem Ltd., Schneider Electric SE, Honeywell International Inc., ABB Ltd., Johnson Controls International plc, NEC Corporation, Toshiba Corporation, NextEra Energy Inc., Eaton Corporation plc, Samsung SDI Co. Ltd., Vistra Energy Corp., AES Corporation, Sungrow Power Supply Co. Ltd., Enersys, Fluence Energy Inc., Amprius Technologies Inc., Sunverge Energy Inc., Envision Energy Inc.

North America was the largest region in the battery energy storage system market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the battery energy storage system market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the battery energy storage system market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

A battery energy storage system (BESS) is a mechanism designed to store energy derived from renewable sources such as solar and wind, releasing it as needed by consumers. This technology utilizes specialized batteries engineered to store electric charge efficiently.

The primary categories of battery energy storage systems are front-of-the-meter and behind-the-meter setups. Front-of-the-meter systems are integrated into the electricity grid, aiding in the consistent management of energy flow. These systems can supply power to off-site locations. They can be connected to either on-grid or off-grid configurations and employ diverse battery types such as lithium-ion, advanced lead-acid, and flow batteries. Such systems find application in various sectors, including telecommunications, data centers, medical facilities, industrial settings, marine operations, among others.

The battery energy storage system market research report is one of a series of new reports that provides battery energy storage system market statistics, including battery energy storage system industry global market size, regional shares, competitors with a battery energy storage system market share, detailed battery energy storage system market segments, market trends and opportunities, and any further data you may need to thrive in the battery energy storage system industry. This battery energy storage system market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The battery energy storage system market consists of sales of nickel metal hydride batteries, zinc bromine batteries and sodium-sulphur batteries. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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