The market for energy storage is booming as the technology becomes mainstream in the market for consumers and businesses looking to save energy and costs by using off-grid energy during peak hours.
This year, grid-connected energy storage is expected to double in size to 2.9 gigawatt hour (GWh), up from 1.4 GWh in 2015, according to IHS Markit. This growth will continue to expand in the next decade, surging to 21 GWh by 2025. During the next decade, Lithium-ion batteries will become the mainstream technology in energy storage, occupying more than 80% of global energy storage installations.
Energy_Storage_Growth_Chart_IHSM2_0“Energy storage is set to grow as fast as solar photovoltaic energy has in recent years, sparking strong interest from a wide range of players and underscored by recent mergers and acquisitions among car manufacturers, major oil and gas companies, and conventional power suppliers,” says Marianne Boust, principal analyst, IHS Markit. “The United States and Japan are leading the way, but we’re also seeing activity in South Africa, Kenya, the Phillippines and other countries, as the cost of batteries continues to decline.”
IHS Markit forecasts that Japan and the U.S. will be the largest regional energy storage markets, generating a third of the market revenues of $50 billion over the next decade. In Australia and Japan, energy storage penetration is expected to exceed 5% of installed power capacity by 2025.
Half of all of the energy storage installations will occur behind the meter, driven by back-up needs and homeowner consumption, IHS Markit says.
“Looking ahead to the future, half of all energy storage will come from households and businesses seeking to control their energy consumption, which will massively disrupt the traditional business models from established utilities and large equipment manufacturers,” Boust says.
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