Stationary Battery Energy Storage to Create a $13.5 Billion Opportunity by 2023

On April 30, Tesla revealed a home battery, Powerwall, that charges using electricity generated from solar panels, or from the grid when utility rates are low, and powers a home in the evening.

“This announcement is another big step forward the large-scale deployment of stationary battery systems,” said Dr Milan Rosina, senior analyst, Energy Conversion & Emerging Materials at Yole Développement. “Indeed energy storage is playing a major role in the energy transition currently underway.”

The “More than Moore” market research and strategy consulting company, Yole Développement, released last week its new technology & market analysis entitled “Energy Management for Smart Grid, Cities and Building: Opportunities for Battery Electricity Storage Solutions.” In this new report, Yole’s analysts propose a detailed analysis of the stationary battery market and an overview of the main players.

Decentralization of electricity sources has become possible because of improving technologies and falling costs for renewable energy installations and energy storage solutions. Decentralization and increased deployment of renewable sources have sustainable drivers: access to clean energy, CO2 emission reduction, nuclear hazard reduction, energy independence, clean mobility, and local energy production to decrease transmission and distribution losses.

“The growing market share of intermittent renewable energies (wind and photovoltaics) in electricity generation reveals a strong interest in stationary battery energy storage systems,” explains Rosina from Yole. And he adds: “Recent cases in China, Japan, and some European countries have shown that the further deployment of renewable energy sources in many areas of the world will require electricity grid upgrades, larger deployment of suitable energy storage systems, and development of suitable energy management solutions.” The market for stationary battery energy storage systems will have strong growth in the future, surpassing $13.5 billion by 2023. This market is driven both by suppliers' development of better performing and less costly battery solutions and by consumers' growing demand for lower energy dependence, greater availability of renewable electricity, and the need for electricity grid stabilization. Battery solutions are particularly attractive for use in buildings having both solar and electricity storage, especially residential buildings; excess photovoltaic electricity can be stored in batteries, then cheap energy can be drawn from the sun or battery during the day when electricity rates are high, and during the night power can be drawn from the grid at low overnight rates. Excess locally generated electricity can also be sold to the utility.

The value chains associated with the management of energy flow (generation, transmission, distribution, storage and consumption) offer opportunities for numerous players from various industries. Based on safe and reliable cells purchased from the established suppliers, many players are currently entering the market as battery integrators — designing and manufacturing battery systems, especially for applications in transport and stationary energy storage (residential and large-size battery energy storage systems (BESS)). “The residential storage market entry barrier is rather low with strong synergies to other products/applications, thus motivating many players to focus on this market segment”, asserts Coralie Le Bret, analyst, Power Electronics & Compound Semiconductors technologies at Yole. And she adds: “The value chain for residential electricity storage market is still greatly dispersed and composed of many small players — more than 50 players offer commercial solutions and others will release their products soon.” Automotive makers (Tesla, BYD, Toyota, Nissan…), their suppliers, and partners are also entering the residential or large-size BESS markets. They profit from the advantage of purchasing battery cells in high quantities and thus at lower prices compared to stationary storage “pure-players”. According to Yole’s analysis, a strong consolidation, new partnerships, and M&A activities will strongly shape the stationary storage market over the next several years.

With its latest technology and market analysis, “Energy Management for Smart Grid, Cities and Building: Opportunities for Battery Electricity Storage Solutions,” Yole’s team proposes a deep understanding of the transition toward renewable energy sources and clean electricity and the development of new battery technologies and solutions. The company analyzes their impact on the electricity business. The market research company also evaluates the expected movements within the value chain and proposes a deep analysis of the residential battery ESS regarding power and energy capacity.