ENERGY STORAGE AS A SERVICE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Energy Storage as a Service Market Size and Trends

Global energy storage as a service market is estimated to be valued at USD 1.81 Bn in 2024 and is expected to reach USD 3.71 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 10.8% from 2024 to 2031.

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Increasing demand for optimizing energy consumption and reducing carbon footprint can drive many commercial and industrial consumers to adopt energy storage services.

Market Driver - Increasing adoption of clean and green energy sources

With growing concerns around environmental degradation due to emissions from fossil fuels, countries and corporations around the world have been actively pushing for transition towards cleaner sources of energy such as solar and wind. While both solar and wind energy have significant advantages over coal and natural gas-powered systems as these are renewable and sustainable, their generation and supply are dependent on climatic conditions which makes them intermittent in nature. For example, solar PV panels can only generate electricity during daytime and their output varies with intensity of sunlight during different times of the day. Wind turbine generation depends on wind speeds, which keep fluctuating.

This intermittent nature of renewable sources poses challenges for power grid management as electricity demand from consumers has to be met precisely at all times by balancing generation and supply. With increasing solar and wind capacity, power grids need to balance the variable nature of their input against predictable consumer demand patterns. Thus, energy storage solutions play a vital role by absorbing excess electricity produced during periods of high renewable generation and supplying it when required the most. Battery energy storage systems help store surplus clean energy and dispatch it to meet demand peaks or compensating for generation downtimes from intermittent sources.

Countries and regions targeting high shares of solar and wind energy as part of their climate change commitments are actively investing in deploying utility-scale battery storage projects. Europe, which has set ambitious renewable targets, witness rising interest from both private developers as well as grid operators to install battery farms at substations which can absorb power during the day from PV plants and firms and feed it after sunset to meet evening peak demand. States like California in the U.S. are pioneering use of large format battery storage solutions to manage fluctuations from their booming solar installations.

Energy-as-a-Service business models are gaining traction as these allow distributed storage asset owners to optimize utilization and monetize their investments without long term ownership. Such operating models are highly relevant for scaling up deployments required to balance the variable renewable power supply. Rising shift towards cleaner power sources can push the need for flexible energy storage infrastructure and boost adoption of storage-as-a-service.

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Growing demand for reliable and uninterrupted power supply

Reliability of power supply has become a critical requirement for both industrial and commercial consumers. Any outage or fluctuation impacts productivity, disrupts operations and leads to heavy losses. While widespread electrification has boosted economic growth, it has also increased vulnerability of all sections to grid failures as more and more processes and services have become dependent on continuous availability of quality power. This rings especially true for digital infrastructure and data centers supporting connected world which have near-zero tolerance for power disruptions.

Reliability needs have only escalated amidst uncertainties around natural disasters becoming more frequent and varied due to climate change impacts. Extreme weather events from hurricanes to wildfires have exposed vulnerabilities of conventional power grids and caused massive and long duration outages over large areas. The pandemic has further underscored how fragile and interdependent our systems have become, bringing into sharp focus the economic and social costs of unstable electricity services.

Distributed energy resources are supplementing conventional generation in many parts of the world. While decentralization enhances energy access and resilience, it also introduces complexity needing advanced coordination and control. Energy storage offers an effective way to firm up intermittent DERs and ensure reliability at both transmission and distribution levels. It provides the needed flexibility to constantly match supply with dynamic consumption patterns by soaking up excess energy and feeding it when generation declines.

Reliable power supply supported by energy storage infrastructure as a utility service is gaining popularity among commercial and industrial consumers as well as utilities striving to strengthen grids against vulnerabilities.