Battery Energy Storage System Market By Battery Type, By Connection Type, By Energy Capacity, By Application, By Ownership Model, By Region and By Country: Industry Assessment, Size, Value, Volume, Share, Growth, Trends, Outlook and Forecast, 2025 – 2035

Report Summary

Battery Energy Storage System (BESS) Market Size Statistics

• According to Vertex, Battery Energy Storage System (BESS) Market is expected to grow at a CAGR of 25% from 2025 to 2035.
• The Global Battery Energy Storage System Market value is projected to reach USD 120 Billion by 2035.
• The Global Battery Energy Storage System (BESS) Market size was valued at USD 21 Billion in 2024.

The global battery energy storage system (BESS) market is experiencing rapid expansion, driven by the rising adoption of renewable energy, grid modernization efforts, declining battery costs, and supportive government policies. With increasing demand for energy storage solutions, installed BESS capacity is set to surge from around 200 GWh in 2024 to over 1,000 GWh by 2035, representing an estimated 250 GW. As countries accelerate their transition toward clean energy, battery energy storage systems are expected to play a critical role in ensuring grid stability, energy efficiency, and optimized power distribution.

Battery Energy Storage System Market Overview & Insights

A Battery Energy Storage System (BESS) is an advanced electrochemical solution designed to store electrical energy and release it as needed. These systems are composed of several critical components, including battery modules, battery management systems (BMS), inverters and power conversion systems (PCS), control mechanisms, cooling and safety systems, enclosures, racking structures, and monitoring tools.

BESS is vital in stabilizing power grids, optimizing energy consumption, and enhancing the reliability of renewable energy sources such as solar and wind. The applications of battery energy storage systems extend across multiple sectors, including grid stabilization, peak load management, and backup power supply. They also play a vital role in microgrids and remote area electrification, support electric vehicle (EV) charging infrastructure, and serve various industrial and commercial energy management needs.

The global adoption of BESS has surged in recent years, fueled by declining battery costs, technological advancements, and favorable regulatory policies. Grid-scale lithium-ion (Li-ion) systems continue to dominate the sector; however, significant innovation is emerging across residential and commercial energy storage, virtual power plants (VPP), vehicle-to-grid (V2G) integration, and long-duration energy storage (LDES). While the industry has made notable strides in improving the safety and efficiency of BESS, ongoing challenges remain, particularly in terms of evolving regulatory standards, compliance requirements, and public perception.

BESS Enabling Clean Technology Industry

Battery Energy Storage Systems (BESS) are transforming the clean technology landscape by acting as a critical enabler for multiple sustainable energy solutions. The clean technology industry encompasses a broad spectrum of innovations aimed at reducing environmental impact and promoting sustainability, including renewable energy sources such as solar, wind, and hydro, as well as electric vehicles (EVs), smart grids, hydrogen fuel, and carbon capture technologies.

BESS for Renewable Energy Integration

BESS mitigates the intermittency of solar and wind power by storing surplus energy during peak generation and discharging it when supply is low. This ensures grid stability, enhances renewable energy adoption, and reduces dependence on fossil fuels. 

BESS for Smart Grids and Grid Modernization

As power grids integrate more distributed energy resources, maintaining stability becomes increasingly complex. BESS enhances grid modernization by providing essential services like frequency regulation, voltage support, and load balancing. It also strengthens smart grid functionality with real-time monitoring and automated energy distribution, improving efficiency and resilience against outages and fluctuations.  

BESS for Electrification of Transportation

BESS supports EV charging infrastructure by optimizing energy distribution and easing grid stress. Second-life EV batteries extend lithium-ion usability for stationary storage. V2G technology further enhances grid flexibility by enabling EVs to store and supply energy, reducing costs and improving efficiency.

BESS for Commercial and Industrial Energy Optimization

BESS enhances energy management by enabling businesses to store electricity for self-consumption, backup power, and demand response participation, reducing costs and grid reliance. Industries with high energy demands leverage BESS for peak shaving and demand-side management, optimizing efficiency and sustainability.

What are the Battery Energy Storage System Market Segmentations and Bifurcations?

Battery Energy Storage System Market Segments by Battery Type

• Lead Acid Batteries
• Sodium Based Batteries
• Flow Batteries
• Lithium-Ion Batteries
• Others

In 2024, lithium-ion batteries dominated the market, accounting for approximately 90% of global BESS installations. Their widespread adoption is driven by advantages such as high energy density, long cycle life, enhanced safety, improved thermal stability, and declining costs. Among various lithium-ion chemistries, Lithium Iron Phosphate (LFP) batteries led with majority market share, primarily due to their superior safety profile and cost-effectiveness compared to Nickel Manganese Cobalt (NMC) batteries. Additionally, the global average price of lithium-ion battery packs dropped to $115 per kWh in 2024, with further cost reductions expected as production scales up.

Sodium-ion batteries have garnered interest, their adoption remains limited due to the continued cost advantage of LFP batteries. However, upcoming BESS project installations are expected to expand this segment, particularly in grid storage, residential applications, and as a substitute for lead-acid batteries.

• In December 2024, Hithium introduced a sodium-ion battery cell designed specifically for utility-scale energy storage.
• In December 2024, the U.S. Department of Energy (DOE) allocated a $50 million grant to accelerate research and development in sodium-ion battery technology.
• In November 2024, BYD unveiled its long-blade sodium-ion battery cell, featuring a 90 Wh/kg energy density, tailored for large-scale grid applications.
• In November 2024, CATL introduced a hybrid battery cell combining lithium-ion and sodium-ion technologies.

Flow batteries-based BESS are experiencing rapid deployment growth, especially in long-duration energy storage applications. These batteries are particularly well-suited for large-scale grid storage projects, offering superior stability and the ability to support peak shifting and load management. In 2024, the market saw substantial capacity additions, especially in Asia and North America. China led with a 700 MWh Vanadium Redox Flow Battery (VRFB) project, while the United States announced 2 GWh in iron flow battery deployments in California. Australia also recorded over 3 GWh of new flow battery installations.

Battery Energy Storage System Market Segments by Connection Type

• On-Grid BESS
• Off-Grid BESS

In 2024, on-grid BESS segment accounted for 75% of total market revenue and around 80% of installed capacity. These systems are primarily deployed in large-scale projects, benefiting from economies of scale that drive down costs compared to off-grid solutions. On-grid BESS plays a crucial role in storing excess electricity when supply exceeds demand and redistributing it during peak consumption periods. By integrating with utility grids, these systems not only enhance grid stability and efficiency but also help lower electricity costs for consumers. Key applications of on-grid BESS include load leveling, peak shaving, and demand-side energy management, ensuring a more balanced and reliable power supply.

Battery Energy Storage System Market Segments by Energy Capacity

• Upto 100 MWh 
• 100 – 1,000 MWh
• Above 1 GWh

The above 1 GWh segment consists of large-scale, utility-operated BESS projects designed to enhance grid reliability, integrate renewable energy, and support national energy security programs. These high-capacity storage systems play a crucial role in long-duration energy supply, peak demand management, and stabilizing the power grid. As utilities increasingly invest in bulk energy storage and grid modernization initiatives, this segment is expected to experience sustained growth. Additionally, economies of scale contribute to lower costs per kWh, making large-scale BESS deployments cost-effective and attractive for utility providers.

The up to 100 MWh segment is experiencing significant adoption in residential and commercial sectors, driven by the growing demand for energy independence, cost savings, and reliable backup power. Lithium-ion battery storage systems, particularly those between 3 kW and 5 kW, are widely used in behind-the-meter applications, enabling businesses and homeowners to optimize energy consumption and reduce reliance on grid power. The increasing deployment of distributed solar installations is further fueling growth in this segment. While the adoption rate remains strong, growth may be slightly slower than that of larger utility-scale projects due to the smaller scale of individual installations.

Battery Energy Storage System Market Segments by Application

• Commercial & Industrial
• Residential
• Utilities

The utility segment dominated the BESS market, driven by increasing electrification efforts in remote and off-grid areas, large-scale renewable energy integration, and infrastructure modernization projects. Utilities are leveraging BESS solutions to enhance grid reliability, optimize energy distribution, and support large-scale power generation from renewable sources. As governments and regulatory bodies introduce policies promoting energy storage adoption, the utility-scale BESS segment is set for substantial growth.

The residential segment is expanding rapidly due to favorable policies encouraging energy storage integration with solar power systems. The increasing adoption of rooftop solar installations has fueled demand for home battery storage solutions, allowing homeowners to store excess energy, reduce reliance on the grid, and enhance energy security. As battery costs continue to decline and net metering policies evolve, residential BESS adoption is expected to rise significantly.

Commercial & industrial segment is experiencing strong momentum, as businesses seek to lower energy costs, improve operational efficiency, and ensure power reliability. Industries with high energy consumption, such as manufacturing, data centers, and retail, are increasingly leveraging BESS for demand-side management, peak load reduction, and backup power solutions. The growing focus on sustainability and energy independence is further accelerating adoption across this segment.

Battery Energy Storage System Market Segments by Ownership Model

• Consumer Owned
• Third Party Owned
• Utility Owned

The utility-owned segment dominated the global BESS market in 2024, driven by significant investments from government and non-government utility providers. As the primary owners of power generation infrastructure, utility companies account for the largest share of BESS deployments, leveraging these systems for grid stabilization, renewable energy integration, and energy demand management. With increasing commitments to decarbonization and grid modernization, utilities are expected to continue leading market growth, supported by favorable policies and large-scale energy storage projects.

The third-party owned segment is gaining traction as energy service providers and independent power producers invest in BESS solutions to offer energy-as-a-service (EaaS) models, demand response programs, and virtual power plant (VPP) initiatives.

What are the Growth Drivers, Challenges, and Opportunities in Battery Energy Storage System Market?

Surging Renewable Energy Integration & Grid Modernization Driving BESS Market

With global renewable energy capacity projected to exceed 5,500 GW by 2030, BESS is becoming essential for stabilizing grids as solar and wind installations increase. Since these energy sources are intermittent, BESS ensures continuous power supply, frequency regulation, and peak demand management. Developed economies such as the U.S., EU, and Japan are upgrading aging grid infrastructure, while emerging markets in India, Africa, and Latin America are investing in storage solutions to expand energy access.

Favorable Government Policies & Financial Incentives Propel Battery Energy Storage System Market

Governments worldwide are accelerating BESS adoption through subsidies, tax credits, and regulatory support. The U.S. Inflation Reduction Act (IRA) of 2022 provides a 30% investment tax credit (ITC) for standalone storage, significantly lowering capital costs. The EU Green Deal and REPowerEU Plan emphasize battery storage for energy security, while China’s 14th Five-Year Plan mandates 30 GW of energy storage installations to support carbon neutrality by 2060. Global electricity market reforms are enabling BESS participation in ancillary services such as frequency regulation and peak shaving, making battery energy storage solutions economically viable.

Declining Battery Costs & Advancements in Storage Technologies Boost BESS Market

The cost of lithium-ion battery packs fell to $115/kWh in 2024, with further declines expected, reaching below $100/kWh by 2025 and around $70/kWh by 2030. LFP (Lithium Iron Phosphate) batteries dominate BESS installations due to their lower cost, improved safety, and longer lifespan. Meanwhile, sodium-ion batteries are emerging as a cost-effective alternative, particularly for long-duration storage applications, thanks to sodium’s abundance and lower production costs. Additionally, flow batteries are gaining traction in grid-scale energy storage beyond four-hour durations, offering enhanced stability for large-scale renewable integration.

AI-Driven Data Centers & High-Demand Energy Storage Solutions Provide Opportunities in BESS Market

With the global data center power market projected to grow significantly, BESS is becoming a critical solution for power backup, load balancing, and energy resilience. AI-driven workloads and cloud computing require stable, uninterrupted power, driving demand for BESS as an alternative to diesel generators. Tech giants such as Google, Microsoft, and Amazon are investing in battery-powered backup systems to reduce carbon footprints and improve sustainability. Lithium-ion and sodium-ion batteries are well-positioned to meet this demand due to their high efficiency and fast response times.

• In 2023, Microsoft launched a BESS-powered data center to phase out diesel generators in Sweden.
• In 2023, Amazon invested in a grid-connected Battery Energy Storage System (BESS) project to power its hyperscale data centers, achieving their goal of matching 100% of their electricity consumption with renewable energy sources, including through projects such as solar and battery storage facility.

Battery Energy Storage System Market Report Scope & Snapshot

What are the Regional and Country Trends in Battery Energy Storage System Market?

Global Battery Energy Storage System Market - Regional Insights and Trends

• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa

North America is one of the leading regions in the BESS market, with the U.S. and Canada at the forefront of grid-scale energy storage, renewable energy integration, and EV charging infrastructure expansion. In 2024, the region surpassed 40 GWh of installed battery storage capacity, driven by federal and state incentives. The U.S. Inflation Reduction Act (IRA) of 2022, which provides investment tax credits for standalone energy storage projects, has significantly boosted investments in large-scale BESS solutions. Additionally, there is growing interest in long-duration energy storage systems to support grid reliability. However, potential shifts in energy policies under different administrations could introduce regulatory uncertainties in the coming years.

Europe BESS market is growing due to net-zero targets, grid decentralization, and ambitious renewable energy commitments. Countries such as Germany, the U.K., France, and Spain are making significant investments in wind and solar power, necessitating advanced energy storage solutions. The U.K. is set to reach 8 GW of cumulative grid battery capacity by the end of 2025. Additionally, the Russia-Ukraine conflict has heightened energy security concerns, accelerating Europe's push for energy independence through large-scale BESS deployments.

In 2024, Asia Pacific dominated the global BESS market, accounting for the largest share of deployments, with China leading in the region. In 2024, China alone contributed nearly 60% of global BESS installations, driven by state-led renewable energy expansion and ambitious carbon neutrality goals. India is on track to add around 40 GWh of BESS capacity by 2032, supported by government policies aimed at enhancing grid stability and integrating solar and wind power. Countries such as Japan, South Korea, and Australia are also investing heavily in battery energy storage systems. The Asia Pacific BESS market is expected to experience the highest CAGR from 2025 to 2035, fueled by rapid advancements in battery technology, declining costs, and government-backed energy transition initiatives.

How is the Competition Scenario in Battery Energy Storage System Market?

Battery Energy Storage System Market - Competition Landscape

The battery energy storage system (BESS) market is highly competitive, driven by technology innovation, cost efficiency, and scalability. Leading manufacturers are expanding gigafactories to reduce costs, enhance supply chain stability, and meet rising demand. Investments in localized production mitigate geopolitical risks and supply disruptions. BESS providers are racing to deliver cost-effective, intelligent, and scalable battery storage solutions.

Beyond lithium-ion technology, companies are advancing sodium-ion, solid-state, and flow batteries, offering longer lifespans, improved safety, and lower costs. AI-driven energy management software is transforming BESS optimization, enhancing efficiency, automation, and predictive maintenance.

Vertical integration is reshaping the market, with key players securing raw materials and integrating power conversion and control systems. The shift toward fully integrated BESS solutions, including battery storage, software, and installation services, is intensifying competition.

Some of the key companies operating in Battery Energy Storage System (BESS) market include -

• AEG Power Solutions
• BYD Energy
• CALB
• Canadian Solar
• CATL
• CMBlu Energy
• Envision
• ESS Tech
• Eve Energy
• Fluence
• Form Energy
• Freyr
• GE Vernova
• GNB Corporation (Stryten Energy) / Exide Technologies
• Hitachi ABB Power Grids
• Hithium
• Hyper Strong
• Invinity
• LG Energy Solution
• NEC Corporation
• NGK Insulators Ltd
• Nidec Conversion
• Panasonic 
• Powertree Services
• Powin
• Rept Battero
• SAFT
• Samsung SDI
• Sungrow
• Tesla
• Trina Storage
• VRB Energy
• Wartsila
• Others