According to Research and Markets report "Battery Energy Storage System Market by Element, Battery Type, Connection Type, Ownership, Application, and Geography - Global Forecast to 2023" the battery energy storage system market is expected to grow from $1.98 Billion in 2018 to $8.54 Billion by 2023, at a CAGR of 33.9% between 2018 and 2023.
Factors that will drive the growth of the market include the increasing demand for grid-connected solutions, high demand for the lithium-ion technology in the renewable energy industry, and declining prices of lithium-ion batteries.
The lithium-ion batteries are expected to hold the largest share of the battery energy storage system market between 2018 and 2023.
The battery energy storage systems market for on-grid connection is expected to grow at a higher CAGR between 2018 and 2023. The load leveling, peak shaving, and power demand management are the main applications of any on-grid connected battery energy storage system installed with electrical grids. These factors contribute to the growth of the market for on-grid battery energy storage systems.
The market for the customer-owned battery energy storage systems is expected to grow at the highest CAGR between 2018 and 2023. The customer-owned battery energy storage systems help reduce the electricity cost, as electricity is charged under the time-of-use (TOU) tariff. Under the TOU tariff, the customer can easily reduce the energy cost (electricity cost and annual investment cost) through the adoption of battery energy storage systems.
Batteries held the largest size of the battery energy storage system market in 2017. It leads to 60% of the total cost of the system.
Availability of types of battery is driving the growth of the battery energy storage system market for this market.
The battery energy storage system market for utilities is expected to grow at the highest CAGR between 2018 and 2023. To overcome problems around demand management, the utilities install battery energy storage systems with the electric grids, which control the voltage and frequency deviations.
The battery energy storage systems used in utilities is a cost-effective alternative to replace a conventional infrastructure, especially in helping substations, and transmission and distribution (T&D) line to meet growing peak demands.
These factors are fostering the growth of the battery energy storage system market.
Major factors restraining the growth of the battery energy storage system market include high capital investment required for the deployment and lack of the availability of vendors and project financing.
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