What is energy storage?
In recent years, energy storage has emerged as one of the highest sought-after energy solutions. Deployments are not just soaring — they’re breaking records, too.
For example, let’s look at the community, commercial and industrial (CCI) segment, where energy storage installations have increased by as much as 25% year-over-year.
In Q1 2023, CCI energy storage installations recorded its second-highest quarter on record, installing 203.3 MWh – a number that represents a 145% increase as compared to the same period in 2022. In Q2 2023, CCI energy storage installations were higher than any quarter in 2022.
And with the help of incentives, such as those included in the federal Inflation Reduction Act, CCI deployments are expected to grow 3 GW by 2027.
So, whether your organization wants to lower costs, reduce emissions or minimize brief power disruptions, now is the time to take a closer look at the benefits of investing in an energy storage system.
Keep reading to learn more about what energy storage is and how it works – and what this investment can mean for your organization today and in the future.
How does energy storage work?
Most energy storage systems can be broken down into five categories: battery, thermal, mechanical, pumped hydro and hydrogen.
But battery energy storage is by far the most common and widely accessible form of storage, with lithium-ion batteries making up 90% of the global grid battery storage market.
Energy storage systems have advanced dashboards that coordinate energy production and meet demand whenever it’s needed. And while these batteries can be standalone, charging from the grid when rates are affordable, they’re most often paired with solar panels in a process that can be most easily understood by breaking it down into three simple steps:
- Step 1: Sunlight captured by your company’s solar panels charge your battery energy storage system during daylight hours.
- Step 2: Algorithms analyze data that includes weather patterns, utility rate structures, usage history and more to coordinate energy production, making the best decision on when to store energy and when to use it.
- Step 3: Energy is then discharged from the battery energy storage system during times of high usage or when you need it most.
This allows you to continue to power your business when the sun isn’t shining or during peak energy demands during the day, helping to keep your energy flowing as seamlessly as possible.
Why do I need energy storage?
There’s a reason why battery energy storage systems are a favorite among organizations: They’re energy-efficient, largely low-maintenance and don’t require much effort or expertise from your organization. Plus, they’re a long-term investment with an average lifespan of 15 to 30 years.
And when combined with solar panels, battery energy storage systems can check the boxes your organization cares most about:
- Flexibility: Analytics and advanced monitoring can be customized to meet your organization’s unique needs. If you’re in an environment that experiences all four seasons, battery energy storage has multiple dispatch modes that can easily meet your cooling and heating needs throughout the day. And they take up a relatively small footprint, allowing them to fit in urban environments as well as in large, sprawling spaces.
- Price Predictability: By storing low-cost energy and delivering it during peak periods of higher electricity rates, you have more control over your energy output, are better positioned to save on your overall energy costs and may be able to avoid peak usage penalties in certain electricity markets. And when financed as a power purchase agreement, you can get the budget certainty your finance department needs, helping you to better predict the cost of energy for years to come.
- Reliability: By releasing energy when you need it, you’re better protected against brief, unplanned power outages and grid fluctuations that may impact sensitive equipment. And when used as part of a microgrid, your battery storage energy system can help dispatch energy almost instantaneously.
- Sustainability: When it comes to sustainability, battery energy storage is a win-win. It has no direct emissions. It’s energy efficient. It recycles electricity. That means it will not only help your organization advance its sustainability goals but will also provide environmental, social and governance (ESG) investment value.
Where is battery energy storage being used today?
From manufacturing and distribution facilities to wastewater plants and college campuses, energy storage projects can fit the needs of businesses and campuses across several industries.
Here are some examples of how energy storage is being used today:
- Brigham Young University-Hawaii’s renewable energy system includes rooftop solar, carport solar and battery energy storage. The addition of battery storage allows the campus to operate during utility power outages and adds to the resiliency of the campus infrastructure. The estimated annual electricity production of the entire project is 6.37 megawatt-hours – enough to meet an estimated 39% of the university’s energy needs each year.
- Blue Lake Rancheria is a federally recognized Native American tribal government and community in a remote region of Humboldt County, California. Its solar plus energy storage system cuts energy costs when the grid is up and powers up to 50% of operations when the grid is unavailable.
- Pleasanton Unified School District serves nearly 15,000 students in elementary, middle and high schools. At no upfront cost to the district, Amador Valley High gained new solar carport canopies and a battery energy storage system. The energy storage will create an additional hedge against electricity price increases, particularly under time-of-use rates. The combined solar plus storage project is projected to save PUSD more than $2.2 million over the lifetime of its power purchase agreement.
What is the future of energy storage?
Demand for energy storage is only expected to grow, largely driven by rapid growth in the U.S., falling battery energy storage costs, the rising efficiency of battery energy storage and a growing demand for renewable energy.
Globally, more than $5 billion was invested in battery energy storage systems in 2022, almost a threefold increase over the previous year. Globally, the BESS market is expected to get as high as $150 billion by 2030, a number that is more than double its size today.
Countries, such as the United States where demand charges are high, are expected to lead the way.
And with policies that prioritize energy storage procurement, including the federal Inflation Reduction Act and California’s Net Metering Program, energy storage is poised to play a growing, vital role in the global transition to renewable energy.
Take the first step on your sustainability journey
We know investing in energy storage is an important financial decision for your business, and our team is here to help guide you through the process.
Fill out the contact form below to learn more about how an energy storage system can best help your business achieve its unique goals.