Energy Storage as a Service Market (By Services: Bulk Energy Services, Ancillary Services, Transmission Infrastructure Services, Distribution Infrastructure Services, Customer Energy Management Services, Others; By End User: Utility, Industrial, residential and commercial; By Component: Energy Storage System, Control and Monitoring System, Service Contract) - Global Industry Analysis, Size, Share, Growth, Trends, Regional Outlook, and Forecast 2024 – 2033

The global energy storage as a service market size was exhibited at USD 68.19 billion in 2023 and is projected to hit around USD 152.90 billion by 2033, growing at a CAGR of 8.41% during the forecast period of 2024 to 2033.

Key Takeaways:

• North America dominated the market and accounted for over 35.0% share of the global revenue in 2023
• The customer energy management services segment led the market and accounted for over 30.0% share of the global revenue in 2023.
• The industrial, residential, and commercial segment led the market and accounted for over 75.0% share of the global revenue in 2023.

Energy Storage as a Service Market Size in the U.S. 2024 To 2033

The U.S. energy storage as a service market size reached USD 16.71 Billion in 2023 and is anticipated to reach around USD $39.34 Billion by 2033, poised to grow at a CAGR of 8.94%% from 2024 to 2033.

North America dominated the market and accounted for over 35.0% share of the global revenue in 2023 on account of several factors, including high energy consumption due to the presence of various industries such as automotive, aerospace, chemical, and healthcare. The demand for services such as peak load, energy arbitrage, black start, and demand charge management is high among the industrial, commercial, and residential sectors. Thus, industrialists rather than purchasing the energy storage systems opt for energy storage services for regular energy supply and to avoid blackouts.

Asia-Pacific is expected to expand at the highest CAGR of 12.5% over the forecast period. This is due to the presence of various untapped markets, increasing industrialization, and rising energy consumption. The utilities and industries in countries such as India, South Korea, Japan, and China are expected to increase focus on this business model and increase utilization of these services in their system in the future.

The Middle East and Africa is expected to be the second-fastest-growing market over the forecast period. This is due to the presence of emerging markets and remote areas such as Africa where approximately 600 million people do not have reliable power. There is an opportunity for the market players to deploy resilient and distributed microgrids with renewables and energy storage. 

Energy Storage As A Service Market: Overview 

The global energy landscape is undergoing a profound transformation, characterized by the increasing integration of renewable energy sources, advancements in energy storage technologies, and the growing demand for sustainable solutions. Within this evolving paradigm, the concept of Energy Storage as a Service (ESaaS) has emerged as a disruptive force, offering businesses and utilities a flexible and cost-effective approach to meeting their energy storage needs. This overview delves into the key drivers, trends, and opportunities shaping the ESaaS market.

Energy Storage As A Service Market Growth

The market is expected to be driven by the increasing demand for power management services and cost-effective battery backup power in case of a power outage. Moreover, the rise in the consumption of energy in developing and undeveloped countries is accelerating market growth. The ESaaS market witnessed a decline in growth owing to the outbreak of the Coronavirus pandemic in 2020. Lockdown across nations and travel restrictions had a negative impact on the market. Various industries and commercial complexes were shut, which resulted in the decline in the service demand in 2020.

Energy storage as a service is a new model. Thus, limited companies are offering these services at the global level. The majority of the players in this market are operating at the local and regional levels only. For instance, YSG Solar, a U.S.-based company, is offering these services in local areas. There is a significant opportunity for these services from the untapped markets and remote areas where there is a lack of power supply.         

In the developed markets such as the U.S., factors such as peak load challenge and backup power to avoid blackouts are driving the market opportunities. Moreover, the increasing focus towards renewable energy generation in the region and decreasing dependency on fossil fuel energy generation are driving the market demand in the U.S.

According to Synergy BV, the market opportunity for energy storage as a service in the U.S. is driven by factors such as peak load challenges in New York City. Moreover, this model has helped drive the initiative “Renewing the Energy Vision (REV)” of the U.S. states. In addition, the energy storage service model has helped in increasing the focus on identifying non-wire solutions to important CapEx investments in the new distribution grid and substations infrastructure.

However, the ESaaS market has not seen a major dip in growth as it comes under essential services and the government of various countries permitted such services to help public utilities for power management and avoid peak loads and blackouts in the residential areas.   

Energy Storage As A Service Market Report Scope

Energy Storage As A Service Market Dynamics

• Technological Advancements:

Rapid advancements in energy storage technologies play a pivotal role in driving the growth of the ESaaS market. Innovations in battery chemistry, energy management systems, and grid integration solutions are enhancing the performance, efficiency, and scalability of energy storage solutions. Lithium-ion batteries, for instance, have witnessed significant improvements in energy density, cycle life, and cost-effectiveness, making them a preferred choice for ESaaS deployments. Furthermore, the emergence of new storage technologies, such as flow batteries, hydrogen storage, and thermal storage, offers diverse options for ESaaS providers to tailor solutions to specific customer needs. Additionally, developments in software platforms and predictive analytics enable real-time monitoring, optimization, and control of energy storage assets, maximizing their value and reliability. 

• Regulatory Environment and Policy Support:

The regulatory environment and policy support mechanisms significantly influence the adoption and growth of the ESaaS market. Governments worldwide are implementing ambitious renewable energy targets, carbon reduction goals, and grid modernization initiatives, driving demand for energy storage solutions. Incentive programs, subsidies, and favorable regulatory frameworks incentivize investments in energy storage projects, stimulating market growth. Moreover, policies mandating renewable energy integration, grid reliability standards, and energy storage procurement targets create a conducive environment for ESaaS deployments. For example, net metering policies allow customers to monetize excess energy stored during off-peak hours, enhancing the economic viability of ESaaS solutions. 

Energy Storage As A Service Market Restraint

• Initial Cost and Financing Challenges:

One of the primary restraints hindering the widespread adoption of ESaaS solutions is the initial cost and financing challenges associated with energy storage deployments. While ESaaS models offer a subscription-based approach that eliminates the need for upfront capital expenditures, the overall cost of energy storage systems remains a significant barrier for many potential customers. High upfront costs, including equipment procurement, installation, and integration expenses, can deter businesses, utilities, and homeowners from investing in energy storage solutions, particularly in markets where financial incentives and supportive regulatory frameworks are lacking. Additionally, financing constraints, such as limited access to capital or financing options, can impede the scalability of ESaaS projects, particularly for smaller organizations or those with limited financial resources. 

• Interconnection and Grid Integration Issues:

Another significant restraint facing the ESaaS market is interconnection and grid integration challenges. Energy storage systems must be seamlessly integrated into existing grid infrastructure to maximize their value and effectiveness. However, grid interconnection processes can be complex and time-consuming, involving regulatory approvals, technical assessments, and coordination with utilities. Delays or uncertainties in the interconnection process can hinder the deployment of energy storage projects, leading to project delays, increased costs, and operational inefficiencies. Moreover, grid integration issues, such as voltage fluctuations, grid congestion, and system constraints, can impact the performance and reliability of energy storage systems, limiting their ability to provide grid services and deliver value to customers. To address these challenges, stakeholders must collaborate closely with utilities, regulators, and grid operators to streamline interconnection processes, develop standardized protocols, and implement grid-friendly energy storage solutions.

Energy Storage As A Service Market Opportunity

• Market Expansion in Emerging Economies:

One of the most promising opportunities for ESaaS providers lies in expanding their presence in emerging economies. Developing regions often face challenges related to energy access, grid reliability, and environmental sustainability, creating a compelling need for innovative energy storage solutions. Governments in these regions are increasingly prioritizing renewable energy deployment and grid modernization initiatives to address growing energy demand, reduce greenhouse gas emissions, and enhance energy security. ESaaS providers can leverage this favorable regulatory environment and growing market demand to penetrate emerging economies and establish a foothold in untapped markets. 

• Integration with Smart Grid and Microgrid Solutions:

Another significant opportunity within the ESaaS market lies in the integration of energy storage solutions with smart grid and microgrid infrastructure. Smart grids leverage advanced technologies, such as sensors, communication networks, and data analytics, to optimize energy flows, enhance grid reliability, and empower consumers with real-time energy management capabilities. Energy storage systems play a crucial role in enabling the flexibility and resilience required for smart grid operations, serving as a buffer for intermittent renewable energy generation, mitigating peak demand, and providing grid services such as frequency regulation and voltage support. Similarly, in the context of microgrids, energy storage solutions enable islanding capabilities, allowing communities, campuses, and remote facilities to operate autonomously and enhance energy resilience. By integrating energy storage with smart grid and microgrid solutions, ESaaS providers can unlock new value streams, improve grid stability, and meet the evolving energy needs of utilities, businesses, and communities. 

Energy Storage As A Service Market Challenges

• Regulatory Uncertainty and Policy Barriers:

One of the primary challenges hindering the widespread adoption of ESaaS solutions is regulatory uncertainty and policy barriers. Energy storage technologies often operate at the intersection of multiple regulatory domains, including electricity markets, utility regulations, environmental policies, and building codes. Inconsistent or outdated regulations, ambiguous policy frameworks, and regulatory hurdles can create barriers to market entry, delay project approvals, and increase compliance costs for ESaaS providers. Additionally, evolving regulatory landscapes, such as changes in net metering policies, grid interconnection standards, or energy storage incentives, can introduce uncertainty and complexity into the market, deterring investment and inhibiting market growth. To address these challenges, policymakers, regulators, and industry stakeholders must collaborate to develop clear, cohesive regulatory frameworks that support the deployment of energy storage solutions, facilitate market entry, and foster innovation.

• Technology and Market Risks:

Another significant challenge facing the ESaaS market is technology and market risks associated with energy storage deployments. While energy storage technologies offer significant benefits in terms of grid flexibility, energy management, and resilience, they also pose inherent risks related to performance, safety, and reliability. For instance, lithium-ion batteries, the most commonly deployed energy storage technology, are susceptible to degradation, thermal runaway, and safety hazards if not properly designed, operated, and maintained. Moreover, market risks, such as fluctuating energy prices, evolving customer preferences, and competitive pressures, can impact the financial viability and profitability of ESaaS projects. Uncertain revenue streams, limited access to financing, and long payback periods further compound these risks, particularly for project developers and investors. To mitigate technology and market risks, ESaaS providers must prioritize rigorous quality assurance, safety protocols, and risk management practices throughout the project lifecycle. Additionally, diversifying revenue streams, leveraging revenue stacking opportunities, and implementing robust business models can help mitigate market uncertainties and improve project economics. 

Segments Insights:

Service Insights

The customer energy management services segment led the market and accounted for over 30.0% share of the global revenue in 2023. Customer energy management services include power reliability, power quality, retail electric energy time-shift, demand charge management, and increased self-consumption of solar PV. Energy storage as a service model has a huge demand for customer energy and power management. It is used as backup power for power reliability when the customer uses solar energy and other renewable energy sources.

The ancillary services segment is likely to expand at the fastest CAGR of 11.7% over the forecast period and is expected to gain high momentum during the upcoming years owing to the increasing adoption of battery storage systems in the ancillary service market. Utilities are decreasing dependency on conventional fossil fuel generation and focusing on renewable and battery storage systems for ancillary services. Ancillary services include frequency regulation, spinning/non-spinning supplemental reserves, voltage support, and black start. 

End-user Insights

The industrial, residential, and commercial segment led the market and accounted for over 75.0% share of the global revenue in 2023. Energy storage as a service model is majorly adopted by industrial, residential, and commercial sectors. The industrial sector utilizes these services for reliable power and stable energy supply. Big housing societies and remote residential areas utilize it for regular power supply and lowering the cost of energy consumption.

The utility segment is likely to expand at the fastest CAGR of 11.2% over the forecast period. The increasing focus of energy and power facilities on sustainability is one of the major driving factors for energy storage as a service model. Decreasing dependency on the conventional fossil fuel generators for services such as black start, voltage support, and energy arbitrage by the utilities and increasing focus on renewable power generation and battery storage for such services are expected to drive the market.

Key Developments

• Sonnen, a major operator in the sectors of smart energy storage systems and novel energy services for households was acquired by Royal Dutch Shell PLC in February 2019, increasing its offerings of residential smart energy storage and energy services.
• Renewable Energy Systems was given a four-year contract in the UK in September 2016 to offer frequency response services to the National Grid network using a 35-MW lithium-ion battery energy storage system.
• Engie Group and Google signed a deal in August 2021 to provide carbon free electricity in Germany. The arrangement will help Google meet its carbon free energy goals for its data centers, cloud regions, and offices throughout the world by 2033.
• Schneider Electric, a French multinational corporation that specializes in energy and digital automation solutions, announced a partnership with Huck Capital, an investment firm, in August 2020 to provide clean energy as a service to commercial and industrial buildings.

The mergers and acquisitions, partnerships, new product development, business expansions, collaborations, supply contracts, agreements, and contracts are some of the important marketing strategies used by the major market players to maintain their market position.

Key Companies & Market Share Insights

Energy storage as a service is a business model which came to light in 2016. According to Synergy BV, the term energy storage as a service was trademarked by Constant Power in 2016. The market is in the initial phase of its growth. There is a significant opportunity for players in emerging and untapped markets. Few companies are operating in this market. The competition among players is based on numerous parameters including service offerings, corporate reputation, and price. Distribution network expansion, joint ventures, and mergers & acquisitions are some of the key strategies being adopted by the key players to strengthen their position in the market and gain a greater market share. For instance, Customized Energy Solutions acquired Powerit Solutions (Advanced Demand Management Company) in 2016. Through this acquisition, the company enhanced its demand response services for suppliers, industrialists, and more.

Some of the prominent players in the energy storage as a service market include:

• Siemens Energy
• Veolia
• Honeywell International Inc.
• NRStor Inc.
• ENGIE Storage Services NA LLC
• Customized Energy Solutions Ltd.
• YSG Solar
• Suntuity
• Hydrostor Inc.

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2021 to 2033. For this study, Nova one advisor, Inc. has segmented the global energy storage as a service market.

Service

• Bulk Energy Services
• Ancillary Services
• Transmission Infrastructure Services
• Distribution Infrastructure Services
• Customer Energy Management Services
• Others

End-user

• Utility
• Industrial, Residential & Commercial

By Component 

• Energy Storage System
• Control and Monitoring System
• Service Contract

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa (MEA)