Renewable Energy Storage Market Size, Share, Growth & Industry Analysis, By Source (Wind, Hydroelectric, Solar, Bio Energy, and Others), By Application (Residential, Industrial, Commercial, and Utility-Scale), and Regional Analysis, 2024-2031

Renewable Energy Storage Market Size

Global Renewable Energy Storage Market size was recorded at USD 35.23 billion in 2023, which is estimated to be at USD 39.16 billion in 2024 and projected to reach USD 89.06 billion by 2031, growing at a CAGR of 12.46% from 2024 to 2031. In the scope of work, the report includes services offered by companies such as General Electric, Delta Electronics, Inc., Hitachi Ltd., Siemens AG, Toshiba, Trinasolar, NextEra Energy Resources, LLC, EVLO Energy Storage inc, ABB, HERO FUTURE ENERGIES and others.

Growing development of hybrid energy systems and growing demand for grid modernization are driving the growth of the market. The growing development of hybrid energy systems is a significant trend in the renewable energy storage market. These systems integrate multiple renewable energy sources, such as solar, wind, and hydro, with advanced storage technologies to create a more reliable and efficient energy solution.

The primary factor supporting this development is the growing need to address the intermittent nature of renewable energy sources. By combining different types of energy generation, hybrid systems ensure a more consistent power supply, even when individual sources are not producing energy. For instance, solar panels generate electricity during the day, while wind turbines complement this generation during windy conditions, and storage systems store excess energy for use during periods of low generation. This approach enhances grid stability and maximizes the utilization of renewable energy resources.

Additionally, hybrid energy systems reduce reliance on fossil fuels, thereby contributing to a reduction in greenhouse gas emissions and supporting global efforts to combat climate change. The scalability and flexibility of hybrid systems make them suitable for a wide range of applications, from small-scale residential setups to large utility-scale projects, leading to their widespread adoption across different sectors.

Renewable energy storage refers to the technologies and systems used to store energy generated from renewable sources, such as solar, wind, and hydroelectric power, for later use. These storage solutions are crucial for managing the intermittent and variable nature of renewable energy, ensuring a stable and reliable power supply. The primary sources of renewable energy storage include batteries (lithium-ion, flow, and solid-state), pumped hydro storage, thermal storage, and compressed air energy storage.

Batteries are the most widely used storage technology, offering versatility and scalability for various applications. Pumped hydro storage, the most established form of large-scale energy storage, involves pumping water to a higher elevation during periods of low demand and releasing it to generate electricity during peak demand.

• For instance, a report published by IEA stated, electricity production from renewable sources rose 4.6% year-on-year to 340.7 TWh in March 2024. This growth was driven by increases in solar (+16.7% y-o-y) and hydro (+5.7% y-o-y) power, led by OECD Europe’s 7.9% overall increase, despite a 1.4% drop in wind power generation.

Thermal storage systems store excess heat or cold for later use in heating or cooling applications, while compressed air energy storage uses surplus energy to compress air, which is then released to generate electricity when needed.

These storage solutions are applied across multiple sectors, including residential, commercial, industrial, and utility-scale energy systems. They play a critical role in enhancing grid stability, integrating more renewable energy into the power mix, and reducing dependency on fossil fuels, thus contributing to a sustainable and resilient energy future.

Analyst’s Review

In the rapidly evolving renewable energy storage market, companies are increasingly focusing on innovative strategies to enhance their competitive edge and fuel growth. Key players are investing heavily in research and development to advance storage technologies, improve efficiency, and reduce costs.

• For instance, in 2023, IEA member countries allocated approximately USD 26.4 billion to energy research, development, and demonstration (RD&D), marking a 5% increase. The United States led in spending on energy RD&D among IEA members, followed by France, Japan, Germany, Spain, and the United Kingdom.

Strategic partnerships and collaborations are becoming more prevalent, allowing companies to leverage shared expertise and resources to accelerate technological advancements. Additionally, firms are expanding their presence in emerging markets, recognizing the vast potential for growth in regions with increasing energy demands and significant renewable energy resources. The growth trajectory of the market is fueled by the declining costs of both renewable energy systems and storage technologies, making these solutions more accessible and economically viable.

Companies are further prioritizing sustainability and environmental impact, aligning their strategies with global efforts to combat climate change. Major imperatives for key players include navigating regulatory and policy landscapes, securing funding and investment, and developing scalable solutions that are deployed across various applications and geographic regions.

Renewable Energy Storage Market Growth Factors

The growing demand for grid modernization and stability is a significant factor boosting the growth of the renewable energy storage market. As energy systems worldwide transition toward increased reliance on renewable sources, the need for a modernized grid that handle the variability and intermittency of these sources becomes paramount. Modern grids are required to integrate diverse energy sources, manage bi-directional power flows, and maintain a stable supply despite fluctuations in generation.

Advanced energy storage solutions play a crucial role in this context by providing the necessary flexibility and responsiveness to balance supply and demand. They help mitigate the challenges posed by the intermittent nature of renewables, such as solar and wind, by storing excess energy during periods of high generation and releasing it during times of low generation or peak demand.

Additionally, modern grids equipped with energy storage enhance resilience against outages and disruptions, improve energy efficiency, and reduce reliance on fossil-fuel-based peaking power plants. The growing shift toward grid modernization is supported by regulatory mandates, financial incentives, and the increasing digitalization of energy infrastructure, which underscore the critical need for robust, flexible, and sustainable grid solutions.

High initial capital investment is a significant restraint in the renewable energy storage market, impeding widespread adoption. The deployment of advanced energy storage systems, such as large-scale batteries or pumped hydro storage, requires substantial upfront financial resources. These costs include the purchase and installation of the storage technology itself, as well as related expenses such as infrastructure upgrades, integration with existing energy systems, and maintenance provisions. For many potential adopters, particularly in developing regions or among smaller enterprises, these high initial costs serve as a barrier to adoption.

Financing such projects often necessitates securing substantial investments or loans, which present a major challenge due to perceived risks and uncertain returns. Furthermore, despite the long-term cost savings and efficiency gains offered by energy storage solutions, the initial financial outlay remains a significant barrier. To overcome this restraint, there is a growing need for innovative financing models, such as power purchase agreements, leasing options, and government subsidies or incentives, which help reduce the financial burden and make energy storage more accessible and attractive to a broader range of stakeholders.

Renewable Energy Storage Market Trends

The emergence of decentralized energy storage solutions is a notable trend in renewable energy storage market, propelled by advancements in technology and changing consumer preferences. Decentralized storage involves placing smaller, distributed storage systems closer to the point of energy consumption, such as in homes, businesses, and local communities. This trend is further fueled by the growing demand for energy independence, resilience, and sustainability.

Consumers are increasingly looking to generate and store their own energy, thereby reducing their reliance on centralized power grids and fossil fuels. Technological innovations, such as improved battery efficiency and reduced costs, have made decentralized storage more feasible and attractive. These systems provide numerous benefits, including enhanced grid stability, reduced transmission losses, and the ability to better manage local energy demand and supply.

Additionally, decentralized storage supports the integration of renewable energy sources, enabling consumers to store excess energy generated from solar panels or wind turbines for use during periods of low generation. This trend is further supported by favorable policies and incentives aimed at promoting renewable energy adoption and grid resilience.

Segmentation Analysis

The global market is segmented based on source, application, and geography.

By Source

Based on source, the market is segmented into residential, industrial, commercial, and utility-scale. The hydroelectric segment captured the largest renewable energy storage market share of 35.85% in 2023. One of the primary factors contributing to this growth is the existing infrastructure and significant investments in hydroelectric facilities.

Additionally, hydroelectric power plants offer the unique advantage of providing both energy generation and storage capabilities through pumped hydro storage systems. These systems store excess energy by pumping water to a higher elevation during periods of low demand and generate electricity by releasing it during peak demand, thus playing a crucial role in grid stability and energy management.

• For instance, according to Invest India, India’s installed non-fossil fuel capacity has surged 396% over the past 8.5 years, reaching over 201.75 GW, or 45.3% of the nation’s total capacity by May 2024. In 2022, India led globally with a 9.83% year-on-year growth in renewable energy additions. Solar capacity increased 30-fold to 84.27 GW in nine years, with potential estimated at 748 GWp by the National Institute of Solar Energy.

The relatively low operational and maintenance costs of hydroelectric plants, combined with their long lifespan, enhance their attractiveness. Environmental benefits, such as low greenhouse gas emissions and the ability to support local ecosystems, further contribute to the expansion of the segment.

By Application

Based on application, the renewable energy storage market is classified into wind, hydroelectric, solar, bio energy, and others. The commercial segment is anticipated to witness a significant growth, registering a CAGR of 15.35% over the forecast period. Commercial entities, ranging from small enterprises to large corporations, are investing heavily in energy storage technologies to enhance energy efficiency, ensure power reliability, and manage energy consumption more effectively. The rising awareness and commitment to sustainability and corporate social responsibility are further propelling the growth of the segment.

Additionally, technological advancements and declining costs of energy storage systems, such as lithium-ion batteries, make these solutions more accessible and financially viable for commercial applications. Regulatory frameworks and incentives that support renewable energy adoption prompt businesses to integrate energy storage into their operations. The commercial segment benefits from the scalability of storage solutions, which are tailored to meet specific energy needs, encompassing peak shaving, load shifting, and backup power during outages.

Renewable Energy Storage Market Regional Analysis

Based on region, the global market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

The Asia Pacific Renewable Energy Storage Market share stood around 36.21% in 2023 in the global market, with a valuation of USD 12.76 billion. The region's robust economic growth, coupled with rapid urbanization and industrialization has led to a surge in energy demand. Governments in countries such as China, India, and Japan are implementing aggressive policies and providing substantial incentives to promote renewable energy adoption and energy storage solutions. China positioned as largest in renewable energy production and storage technology development due to its commitment to reducing carbon emissions and transitioning to a more sustainable energy mix.

• For instance, in 2023, according to IEA, China’s renewable electricity capacity growth is projected to nearly triple over the next five years compared to the previous five, representing 56% of global expansion. From 2023-2028, China will deploy nearly five times more renewable capacity than the EU and six times more than the US. The Chinese government’s Net Zero by 2060 target, incentives under the 14th Five-Year Plan (2021-2025), and locally manufactured equipment and low-cost financing drive this expansion.

The rapid expansion of renewable energy projects, such as large-scale solar and wind farms, necessitates effective storage solutions to manage the intermittent nature of these energy sources. Additionally, advancements in battery technology and the declining costs of energy storage systems are making these solutions more economically viable. Investments in smart grid infrastructure and increasing research and development activities are bolstering the growth of the Asia Pacific renewable energy storage market.

Europe is set to experience significant growth at a 12.56% CAGR in the foreseeable future. The European Union's stringent climate policies and ambitious renewable energy targets are major factors fueling this growth. The region aims to achieve climate neutrality by 2050, which necessitates substantial investments in renewable energy and storage technologies. Various member states have introduced supportive regulatory frameworks, subsidies, and incentives to promote the deployment of energy storage solutions. The region's growing focus on energy security and independence from fossil fuel imports leads to a surge in demand for robust energy storage systems that stabilize the grid and integrate higher shares of renewable energy.

• For instance, in March 2024, according to European Environment Agency (EEA), the share increased in 2022 due to reduced non-renewable energy consumption driven by high energy prices. However, Europe’s renewables growth will continue achieving the 2030 target of 42.5% will require doubling the past decade's deployment rates and a significant transformation of the European energy system.

Additionally, Europe is witnessing a surge in research and innovation in battery technologies, particularly in countries such as Germany, which is home to leading energy storage companies and research institutions. The increasing adoption of electric vehicles, which require efficient storage solutions, propels regional market growth. Furthermore, Europe’s commitment to sustainable development and the circular economy supports initiatives that enhance the efficiency and sustainability of energy storage systems.

Competitive Landscape

The global renewable energy storage market report will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions. Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.

List of Key Companies in Renewable Energy Storage Market

• General Electric
• Delta Electronics, Inc.
• Hitachi Ltd.
• Siemens AG
• Toshiba
• Trinasolar
• NextEra Energy Resources, LLC
• EVLO Energy Storage inc
• ABB
• HERO FUTURE ENERGIES

Key Industry Development

• October 2023 (Partnership): Hitachi Energy announced the acquisition of a controlling stake in Seville-based eks Energy. By integrating eks Energy’s power electronics and advanced control capabilities with its own complementary automation, software, and system integration solutions, Hitachi Energy strengthens its position as a leading-edge technology provider in the renewables and BESS market.

The global renewable energy storage market is segmented as:

By Source

• Wind
• Hydroelectric
• Solar
• Bio Energy
• Others

By Application

• Residential
• Industrial
• Commercial
• Utility-Scale

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America