The global battery energy storage systems market was valued at nearly US$ 9 Bn in 2017 and is anticipated to expand at a CAGR of ~12.0% from 2018 to 2026, according to a new report titled ‘Battery Energy Storage Systems Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2018–2026,’ by Transparency Market Research (TMR)

Battery energy storage systems are used to store the energy generated by power plants. These are especially used to store the energy generated by renewable energy power plants in order to ensure smooth flow of electricity despite fluctuation in power generation by renewable energy plants. They are also used in the automotive sector. The battery energy storage systems market is expected to expand at a fast-paced CAGR due to the increase in usage of renewable energy plants as well as electric and hybrid cars.

Increase in number of renewable energy power plants is a major driver of the market, while lack of industry standards is affecting market growth

Various countries are initiating development programs to raise funds for battery energy storage systems. Governments are also entering into public-private partnerships to increase the use of renewable energy. Battery energy storage system is a cost-effective way of providing electricity to the population living off-the-grid. Companies are launching hybrid and electric automobiles to help lower greenhouse emissions. On the other hand, lack of industry standards is hampering the market. For instance, currently, there does not exist any consensus on the precise method of extinguishing a lithium-ion battery fire. Lack of standards can cause safety and regulation issues in various applications, especially in the automotive sector.

Residential sector expected to create lucrative opportunities

Implementation of various government policies such as net zero export limitations, net metering 2.0, tax credits for standalone energy storage systems, and devaluation of exported solar PV has boosted the demand for battery energy storage systems in the residential sector. There is a growing shift in Europe as well as the U.S. to install rooftop solar systems in order to lower global warming through the usage of limited energy.

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Constant technological upgrade to result in substantial threat to manufacturers

Manufacturers of battery energy storage systems are likely to face challenges from the consistent introduction of new technologies. This is estimated to increase the possibility of internal substitution. For instance, lithium-Ion batteries are facing competition from newer types of batteries such as sodium sulfur batteries, sodium ion batteries, and flow batteries.

Lithium-ion battery estimated to be major segment

Lithium-ion batteries are highly preferred, as they have been used for a long time in various industries such as automotive and electronics. The global battery energy storage systems market can be segmented based on technology, application, and region. In terms of technology, the market can be classified into lithium-ion batteries, nickel cadmium batteries, sodium sulfur batteries, sodium-ion batteries, flow batteries, and other batteries. In terms of application, the market can be divided into on-grid connected systems, off-grid connected systems, automotive, and others.