Distributed Energy Storage System Market

Distributed Energy Storage System Market Outlook (2024 to 2034)

The global distributed energy storage system market is projected to exhibit a rise in total revenue from US$ 5.16 billion in 2024 to US$ 12.92 billion by 2034. Sales of distributed energy storage systems are foreseen to increase at a CAGR of 9.6% over the next 10 years (2024 to 2034).

Distributed energy storage systems store the excess energy that is generated to be utilized during power deficiency situations. Across the globe, there is being a significant shift towards renewable energy due to environmental concerns about using fossil fuels and an increase in fossil fuel prices. Today, majority of countries rely heavily on and invest in renewable energy sources to generate electricity. This is resulting in high demand for distributed energy storage technologies, which helps to store the excess energy produced by renewable sources for use during peak demand.

Smart grids work as power grids that integrate various technologies to monitor and control power flow and are effective in the power generation, distribution, and consumption. Distributed energy storage systems support and play a significant role in the deployment and operation of smart grids by balancing power generation and demand throughout the grid.

• Short Term (2024 to 2027): Growing demand for smart grids for energy production and consumption are set to positively influence the sales of distributed energy storage systems.
• Medium Term (2027 to 2030): North America and East Asia are projected to witness high distributed energy storage system demand due to rising focus on renewable energy projects.
• Long Term (2030 to 2034): Surging electric vehicle demand is forecasted to open growth opportunities for distributed energy storage system suppliers.

Introduction of compressed air energy storage (CAES) is one of the notable distributed energy storage system market trends. Compressed air energy storage is utilized in peak valley electric energy recovery adjustment, distributed energy storage, and power generation systems. Countries such as the United States, Germany, Japan, and Switzerland are widely utilizing compressed air energy storage technologies.

• The North American distributed energy storage system market size is projected to reach US$ 3.7 billion by 2034.
• East Asia is estimated to account for 36.7% of the global distributed energy storage system market share in 2024.

Report Attribute	Detail
Distributed Energy Storage System Market Size (2024E)	US$ 5.16 Billion
Forecasted Market Value (2034F)	US$ 12.92 Billion
Global Market Growth Rate (2024 to 2034)	9.6% CAGR
South Korea Market Value (2034F)	US$ 1.13 Billion
Renewable Power Source Demand Growth Rate (2024 to 2034)	9.8% CAGR
Key Companies Profiled	Fluence; Schneider Electric; Tesla; Toshiba Corporation; General Electric Company; Hitachi Energy Ltd.; Juniper Networks; Panasonic Corporation; Jabil Inc.; Johnson Controls; NextEra Energy Resources, LLC; Samsung SDI Co., Ltd.

Which Market Dynamics are Positively Influencing Demand for Distributed Energy Storage Systems?

“Increasing Popularity of Renewable Energy Driving Adoption of Distributed Energy Storage Systems”

• According to Statista, in 2023 the United States totalled electricity consumption of 4,000 terawatt-hours (TWh).

Rising demand for power generation and the global shift towards clean and green energy are driving the demand for renewable energy sources. Respective governments across the world are implying rules and regulations to encourage the use of renewable energy and investing heavily in the same.

Power generated from renewable sources needs to be stored so that it can be utilized during normal as well as peak hours. Distributed energy storage systems for renewable energy storage comprise multiple small storage systems that are distributed and positioned close to end users for storing the energy generated from different sources.

“Advancements in Electric Vehicles Increasing Their Use as Distributed Energy Storage Systems”

Owing to an increase in the standard of living, consumer preferences are shifting away from conventional vehicles towards electric cars. A majority of electric vehicles (EVs) have batteries that are huge capacities that they can store a lot more energy than is required for a typical commute. These cars can store more than enough energy to supply the power that a typical household uses per day in addition to commuting.

By installing a bidirectional charging infrastructure the EVs will be able to be charged when there is an electrical supply and act as a source of power for home appliances when there is not. After its connection, the infrastructure can use the EV's battery bank to store excess energy from the grid, or, if needed, extract it and return it to the grid to balance out variations. Owing to this, demand for distributed battery energy storage systems is expected to grow at a high pace during the forecast period. Governments across the globe are also releasing many policies to aid EV manufacturing, which is further contributing the sales of distributed energy storage systems.

What’s Hampering Revenue Growth of Distributed Energy Storage System Producers?

“High Initial Setup and Battery Cost of Distributed Energy Storage Systems”

Initial setup cost of distributed energy storage systems is high and the maintenance cost is a further addition. Rising costs of several vital minerals required for battery production and supply chain interruptions brought about by ongoing wars between countries such as Russia and Ukraine, and Israel and Palestine & Iran are acting as a cost barrier to the development of battery energy storage systems.

Ongoing conflicts are majorly raising the prices of lithium, which is a key mineral for automobile batteries. Increasing use of lithium and the surging electric vehicle industry are also some of the factors contributing to the high prices of lithium.

How Can New Companies Succeed in the Market?

“Integration of Digital Technologies to Boost Efficiency of Distributed Energy Storage Systems”

The distributed energy storage system market is highly competitive in nature. The new companies eager to enter in this market should focus on introducing advanced systems. New companies should invest heavily on research and development activities for the production of advanced distributed energy storage systems. The integration of digital technologies such as AI and ML in distributed energy storage systems are expected to attract a wider consumer base.

Country-wise Analysis

What’s Driving Distributed Energy Storage System Demand in the United States?

“Growing Trend of Renewable Energy Usage in the Country”

Attribute	United States
Market Value (2024E)	US$ 1.13 Billion
Growth Rate (2024 to 2034)	9.5% CAGR
Projected Value (2034F)	US$ 2.81 Billion

• Around 20% of the electricity generated in the United States in through renewable sources says the Office of Energy Efficiency & Renewable Energy.

The United States is the leading country when it comes to energy generation using renewable energy sources. Central and local governments in the country are employing different regulations and are providing incentives on the adoption of renewable energy technologies. The growing EV demand and rising shift towards renewable energy usage is expected to offer high-growth opportunities for distributed energy storage technology providers in the United States.

Why is the Market for Distributed Energy Storage System Expanding in China?

“Population Growth and High Energy Demand”

Attribute	China
Market Value (2024E)	US$ 914.1 Million
Growth Rate (2024 to 2034)	9.6% CAGR
Projected Value (2034F)	US$ 2.27 Billion

China is the most populous country in the world. Increase in the population is leading to rise in consumption of energy both for urban as well as industrial activities. China first started using distributed energy storage systems in 1998, and since then, these systems have developed rapidly owing to high energy demand in the country.

• In June 2022 china releases a 14th 5-year plan (2021 to 2025) that majorly focuses on energy security, followed by environmental development and decarburization. China has planned to generate 50% of electricity through renewable sources by 2025.

These aspects are set to boost the distributed energy storage system market growth in China during the forecasted period.

Category-wise Analysis

Which is the Most Popular Battery Type in Distributed Energy Storage Systems?

“Superior Power Density, Charging Level, and Voltage Driving Use of Lithium-ion Batteries in Energy Storage Systems”

Attribute	Lithium-ion Batteries
Segment Value (2024E)	US$ 2.83 Billion
Growth Rate (2024 to 2034)	9.7% CAGR
Projected Value (2034F)	US$ 7.13 Billion

Lithium-ion batteries are the most commonly used battery type in energy storage systems and other electronic devices due to their various advantages such as high power density, high charge level, and high voltage. Majority of distributed energy storage systems comprise rechargeable lithium-ion batteries due to its characteristics of absorbing and releasing excess power quickly.

Use of lithium-ion batteries provides dependable and quick frequency response. Lithium-ion batteries have been extensively used in electric vehicles due to the high power-to-weight ratio, low self-discharge, and high energy efficiency, besides their components also being recyclable.

Why are Electricity Grids Set to Hold a Leading Market Share?

“Vital Role of Electricity Grids from Energy Generation to Transportation”

Attribute	Electricity Grids
Segment Value (2024E)	US$ 3.71 Billion
Growth Rate (2024 to 2034)	9.5% CAGR
Projected Value (2034F)	US$ 9.22 Billion

Growing popularity of green power is increasing the adoption of distributed energy storage systems. Electricity grids or power grids are base of energy systems. The electricity grid effectively manages supply and demand of energy used.

All across the globe, the importance of renewable energy is gaining momentum. The vital role of electricity grids in energy transportation is further aiding the overall market growth.

Competitive Landscape

Key players in the distributed energy storage system market are adopting several organic and inorganic strategies to increase their market shares. The integration of advanced technologies for the production of distributed energy storage systems is set to attract a wider consumer base. They are also partnering with other industry leaders to increase their product offerings.

• In October 2021, Gogoro, Taipower, and Enel X collaborated to offer bidirectional charging through their battery swapping stations. This is broadening distributed energy storage systems by using more diverse sources.
• In September 2021, SimpliPhi Power and Lumin partnered to launch a user-friendly app to monitor the generation, consumption, and control of storage systems.

Fact.MR provides detailed information about the price points of key manufacturers of distributed energy storage systems positioned across the world, sales growth, production capacity, and speculative technological expansion, in the recently updated market report.

Key Segments of Distributed Energy Storage System Market Research

• By Energy Source :

  • Electricity Grids
  • Renewable Power Sources

• By Battery Type :

  • Lithium-ion
  • Nickel-cadmium
  • Lead-acid

• By Capacity :

  • Single-Phase
  • Three-Phase

• By End User :

  • Industrial
  • Commercial
  • Residential

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa