Lithium-ion Battery Energy Storage Market Research Report and Outlook by 2028

In 2022, the lithium-ion battery energy storage sector was valued at approximately US$ 7,972.80 million and is projected to grow to around US$ 26,224.37 million by 2028, reflecting an estimated compound annual growth rate (CAGR) of 13.9% from 2023 to 2028.

Lithium-ion batteries are increasingly being recognized for their effectiveness in battery energy storage systems, serving various sectors including residential, commercial, industrial, and utility applications. The growth of infrastructure projects and advancements in the transportation sector are expected to motivate leading companies to explore new market opportunities. Stakeholders are likely to enhance the growth of the battery energy storage market through investments in renewable energy sources such as solar and wind. A significant shift towards low-carbon energy generation solutions is anticipated to create further opportunities for the expansion of the industry, thereby driving the lithium-ion battery energy storage market forward.

Within the lithium-ion battery energy storage market, these batteries boast several appealing technological attributes for energy applications, such as modularity, high energy density, and impressive charging and discharging efficiency, which can surpass 90% at the module level. The advantageous characteristics of lithium-ion batteries are expected to positively influence the growth trajectory of the lithium-ion battery energy storage market.

Effects of the COVID-19 Pandemic on the Lithium-ion Battery Energy Storage Market

The COVID-19 pandemic significantly altered consumer perceptions regarding their battery storage requirements. Throughout the pandemic, battery technology remained relatively stable, leading to increased capacity in developing nations. For example, the mix of grid-scale battery technologies remained largely unchanged in 2021 compared to 2020. The newly installed capacity continued to favor lithium-ion batteries, with the total installed grid-scale battery storage capacity reaching 16 GW by the end of 2021, marking an increase over the previous five years. The number of installations surged by 60% in 2021 compared to 2020, with over 6 GW of storage capacity added. This marked the second consecutive year of substantial installation growth. The United States, China, and Europe emerged as the leading regions in the Battery Energy Storage System (BESS) market. In 2021, global investments in battery energy storage reached approximately US$ 10 billion. Given the current project pipeline and new capacity targets set by various governments, investments in battery energy storage are expected to gain significant momentum, following robust growth in 2021. The energy sector is gradually expanding, which will have a considerable impact on the lithium-ion battery energy storage market.

In North America, the United States holds the largest share of the lithium-ion battery energy storage market. The increasing awareness of renewable energy adoption and rising investments in solar and wind energy projects are driving the demand for lithium-ion batteries for energy storage. In the second quarter of 2022, construction began on a 300 MW solar power plant named 7V Solar Ranch in Texas, with an investment of US$ 282 million, expected to be completed by the fourth quarter of 2023. Additionally, the Fayette County solar farm, also in Texas, commenced construction in 2022, with a capacity of 240 MW and an investment of US$ 280 million. In March 2022, Enel Green Power announced the initiation of the 300 MW Seven Cowboy wind project in Oklahoma, with a substantial investment of US$ 3 billion, projected to generate over 1.3 TWh of energy annually once operational. Thus, the increasing investments in renewable energy in the United States are significantly contributing to the growth of the lithium-ion battery energy storage market in the region.

The overall size of the lithium-ion battery energy storage market has been determined through a combination of primary and secondary research methods. The research process began with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the lithium-ion battery energy storage market. This approach also aimed to provide an overview and forecast of the market size across all segments. Furthermore, numerous primary interviews were conducted with industry participants to validate the findings and gain analytical insights. Participants included VPs, business development managers, market intelligence managers, and national sales managers, along with external consultants such as valuation experts, research analysts, and key opinion leaders specializing in the lithium-ion battery energy storage market.