Energy Storage System Buyer’s Guide 2023

Gabrielle Anderson Release: February 8, 2023 Update: February 9, 2023

As more homeowners and businesses strive to lessen their reliance on the grid and lower their energy bills, have become an increasingly significant component of renewable energy initiatives.

In recent years, energy storage devices have become an integral part of many clean energy programs due to the increased use of renewable energy sources such as solar and wind. As technology and manufacturing keep getting better and prices keep going down, energy storage systems are becoming cheaper and more available to a wider range of consumers.

energy storage system buyer's guide on the Bay Energy Blog

In this buyer's guide, we'll take a detailed look at the different available on the market, their features, real-world applications, and key considerations to keep in mind when making your decision. We will also provide an in-depth overview of the current state of the energy storage market, including recent developments, trends, and projections for the future.

The Characteristics of Energy Storage Systems

Types of Technologies

Energy storage systems (ESS): are classified into 4 main segments based on their technology: mechanical, thermal, electrical, and chemical.

1. store energy as potential energy in an object under mechanical stress. Examples include:


Compressed air energy storage (CAES)

Tension-based systems

Pumped hydro storage (PHS)

Flywheels: store energy in a rotating mass, with the energy proportional to the square of the rotational speed. In uninterruptible power supply (UPS) systems, flywheels are often employed.

CAES:stores energy in the form of compressed air in a container, which is then released via a turbine to generate power. It is also implemented in grid-scale energy storage.

Tension-based systems: store energy in a spring or cable as tension, which may then be released to power a generator. In addition to this, they are utilized in applications involving micro-grids.

PHS: stores energy by pumping water from a lower to an upper reservoir, which can later be released to turn a turbine and generate electricity. It's also utilized for large-scale energy storage, particularly in places with plenty of water.

Features of mechanical energy storage systems:

● Advantages: high energy density, low maintenance, long cycle life, and low environmental impact.

● Disadvantages: high initial capital costs, limited scalability, lower energy efficiency compared to other forms of energy storage.

● Suitability: power capacity, discharge duration, efficiency determine a mechanical .

Mechanical energy storage systems play a crucial role in the development of a sustainable energy system and the integration of renewable energy sources. Their high efficiency, long cycle life, and low maintenance costs make them a competitive option for various energy storage applications.

2. Thermal Energy Storage (TES) systems are systems that store excess heat or cold generated by various energy sources (e.g. solar, geothermal, waste heat) for later use. TES systems are used in industrial, commercial, and residential applications to improve energy efficiency and reduce reliance on fossil fuels.

TES can be classified into two types: sensible and latent heat storage.

Sensible heat storage: uses heat exchangers to store heat in a medium, such as water or concrete. It uses heat transfer to raise/lower the temperature of a storage medium.

Latent heat storage: stores energy as a result of a phase change (e.g. melting/freezing of a material). It stores energy as a result of a phase change (e.g. melting/freezing of a material).

Features of thermal energy storage systems:

● Advantages: increased energy efficiency, improved grid stability, reduced energy costs, increased renewable energy utilization.

● Challenges: high upfront costs, maintenance requirements, limited storage capacity

● Applications: HVAC (heating, ventilation, and air conditioning) systems, solar thermal power plants, industrial processes (e.g. steel and glass production), and data centers.

In order to improve energy efficiency and lower greenhouse gas emissions, TES systems are employed in a variety of settings, including buildings, businesses, and power plants.

3. Electrical energy storage systems are devices or technologies that use excess electrical energy to store it for later use. They are critical in the integration of renewable energy sources into the grid, allowing excess energy generated during low-demand periods to be stored for use during peak demand. Among the several types of electrical energy storage systems are:

Battery Energy Storage Systems (BESS)

Flywheel Energy Storage Systems

Compressed Air Energy Storage (CAES)

Pumped Hydro Energy Storage

Thermal Energy Storage

Capacitor Energy Storage

Features of electrical energy storage systems:

● Advantages: better grid stability and dependability, higher renewable energy integration, improved power quality, fewer power outages, increased energy efficiency, lower energy costs, reduced fossil fuel dependence.

● Challenges in the widespread adoption: high upfront costs, limited scalability, regulatory barriers.

However, with advancements in technology and increasing demand for clean energy, the energy storage industry is expected to grow in the coming years.

It's worth emphasizing that the development and deployment of electrical energy storage systems provide new potential for businesses and entrepreneurs, as well as jobs and economic growth. 

Furthermore, the broad use of energy storage systems can aid in mitigating the effects of climate change by lowering greenhouse gas emissions. In short, electrical energy storage systems are a key part of the move to a more sustainable, reliable, and resilient energy system for a better future.

4. Chemical energy storage systems (ESS) are a type of energy storage system that stores energy in the chemical bonds of a substance and then releases it as needed. They work by using a chemical reaction to store energy, which can then be converted back into electrical energy or heat when needed.

Some common examples of chemical ESS include:

Batteries: store energy through chemical reactions between electrodes and electrolytes. Examples include lithium-ion batteries and lead-acid batteries.

Hydrogen fuel cells: store energy in the form of hydrogen, which is then converted into electricity through a chemical reaction with oxygen.

Flow batteries: store energy in two separate liquid electrolyte solutions that flow into a reaction chamber to produce electricity.

Features of chemical energy storage systems:

● Advantages: chemical ESS is great for long-term energy storage without external power. They're also versatile, scalable, and energy storage-ready. It expands or contracts energy storage capacity, making it appropriate for massive renewable energy projects or remote places without grid connections.

● Challenges: chemical ESS adoption is still hampered by high costs, low energy conversion efficiency, and the necessity to handle end-of-life waste. Not only that, but improper management of the chemicals used in chemical ESS can pose serious threats to human health and the natural environment.

● Applications: such as grid-scale energy storage, electric vehicles, portable electronics, and renewable energy systems.

Broadly speaking, the development of chemical ESS is crucial for the switch to a low-carbon, sustainable energy system. Despite the challenges, chemical ESS demand is likely to rise as the world transitions to renewable energy and electric vehicles become more popular. Constant effort is being put into discovering new and better ways to store and consume energy, as well as enhancing the efficiency, safety, and cost-effectiveness of these systems.

learn different energy storage technologies from Bay Energy

Each of these ESS technologies has its own advantages and disadvantages, and the right choice depends on the specific application and the desired performance characteristics. Although there may be some overlap or other sub-categories, these are the primary categories of energy storage systems.

It is crucial to note that the specific application and needs determine the most appropriate energy storage system, and the characteristics and performance of each method may differ.

In addition to these four main segments, hybrid ESS combines two or more technologies. For example, a thermochemical ESS combines thermal and chemical storage, while a mechanical-electrical ESS uses mechanical storage to charge batteries or supercapacitors.

Type of Connection

Energy storage systems (ESS) are critical components in modern power systems as they allow for the integration of renewable energy sources and improve system reliability. One important aspect of ESS is the type of connection to the power system. The connection type determines how the ESS interacts with the power system and affects its performance and cost.

There are 2 main types of ESS connection, grid connected and grid disconnected.

There are 2 main types of ESS connection: grid-connected and stand-alone.

1. Grid-connected ESS: connected to the utility grid and can be used for various applications such as peak shaving, load leveling, and frequency regulation. These systems can export excess energy to the grid and import energy from the grid as needed. Grid-connected ESS can also provide ancillary services to the power system, such as voltage and frequency regulation, which can help to maintain the stability of the power system.

2. Stand-alone ESS: not connected to the utility grid and is typically used in remote or isolated areas. These systems are self-sufficient and can provide power to a load without the need for a connection to the utility grid. Stand-alone ESS are often used in applications such as telecommunications, off-grid communities, and disaster relief. These systems can be powered by renewable energy sources such as solar and wind, and can also include a backup generator for times when the renewable energy sources are not able to meet the load demand.

3. Hybrid ESS is a combination of Grid-connected and Stand-alone ESS, it can connect to the grid when it is available and disconnect when it is not. This allows for a higher level of reliability and can reduce costs associated with maintaining a stand-alone system. Hybrid ESS can be used in a variety of applications such as microgrids, remote communities, and island power systems.

● Another type of connection is the DC-coupled ESS, which is a type of grid-connected ESS that connects directly to the DC bus of a power inverter. DC-coupled ESS can be used for applications such as solar power generation and electric vehicle charging. The DC-coupled ESS can improve the efficiency of the overall system and reduce the cost of the inverter.

● AC-coupled ESS, on the other hand, connects to the AC side of the power inverter. This type of ESS can be used for applications such as load leveling and frequency regulation. The AC-coupled ESS can also provide ancillary services to the power system, such as voltage and frequency regulation, which can help to maintain the stability of the power system.

The type of connection of an energy storage system can greatly affect its performance and cost. Grid-connected ESS can provide ancillary services to the power system and can export excess energy to the grid, while stand-alone ESS are self-sufficient and can provide power to a load without the need for a connection to the utility grid.

Hybrid ESS can connect to the grid when it is available and disconnect when it is not, and DC-coupled and AC-coupled ESS can improve the efficiency of the overall system and reduce the cost of the inverter. Understanding the different types of connections and their associated benefits can help to determine the best ESS for a particular application.  Let us continue reading to learn more about the types of energy storage systems.

Types of Batteries

Lithium-Ion Batteries: The most common type of energy storage device, lithium-ion batteries are widely employed in consumer gadgets and electric cars. Lithium-ion batteries are well-known for their high energy density, extended life, and little maintenance.

They are also increasingly being used in home and , and because they are generally lightweight and compact, they are simple to install in a variety of environments. However, they can be more expensive than other types of batteries and have a limited number of charge-discharge cycles.

Lead-Acid Batteries: These have been used for decades in backup power systems and have been used for residential and commercial energy storage for a long time. They are relatively inexpensive and have a long life, but are bulky and have a lower energy density than lithium-ion batteries.

Lead-Acid Batteries require regular maintenance, such as adding distilled water to the cells, and are sensitive to temperature changes. They are also known for their environmental impact as they can be toxic and it's not easy to recycle them.

Flow Batteries: These batteries use a liquid electrolyte to store energy, and have a longer life than lithium-ion or lead-acid batteries. Flow Batteries are more scalable, making them a good option for large-scale .

They also have a longer life than lithium-ion batteries and can be more easily maintained and replaced. However, they are currently more expensive and less efficient than other types of batteries. Additionally, they can be bulky and heavy, which can make them harder to install.

Sodium-Sulfur Batteries: These batteries have a long life and are largely employed in utility-scale energy storage projects, but they are expensive and require specialist maintenance. They are temperature sensitive and require specific cooling systems to work properly; nonetheless, they pose a higher fire danger than other types of batteries.

Redox flow batteries: These batteries have a very long life and are very scalable since they use two separate liquids, one to store energy and the other to transmit energy. Redox flow batteries are extremely efficient and can be employed on a large scale. However, they are still a relatively new technology, and their long-term performance is unknown.

Molten salt batteries: These batteries store energy using a mixture of salt and metal and have a high energy density and extended life. Molten salt batteries are very scalable and can be used for large-scale energy storage projects. They do, however, necessitate specialized maintenance and have greater running expenses than other types of batteries. Furthermore, if not handled properly, they can be exceedingly caustic and potentially deadly.

Considerations When Choosing an Energy Storage System

As the globe transitions toward renewable energy sources, energy storage devices are becoming increasingly crucial. They are extensively used in both home and commercial settings. These devices are used to store extra energy generated by renewable sources such as solar and wind.

There are seven important considerations that should be made before selecting an energy storage system. Okay, let's get started.

1.Power Rating

2. Energy Capacity

3. Cost

4. Maintenance




Power Rating. The power rating of an energy storage system refers to the maximum power that it can deliver at any given time. This is an important consideration because it will determine how quickly the system can respond to changes in energy demand.

In a commercial or industrial setting: a high power rating is essential to meet the high energy demand during peak hours.

In a residential setting: a lower power rating may be sufficient.

A higher power rating means that the system will be able to deliver more energy more quickly, which can be beneficial in certain situations. It is also important to note that a higher power rating will typically come at a higher cost.

In addition, the power rating should be considered in relation to the energy capacity of the system. A high power rating and low energy capacity will result in a system that can deliver a lot of power quickly, but will not be able to sustain that power for a long period of time.

Energy Capacity. A storage system's energy capacity is the maximum quantity of energy it can hold. How long the system can run before needing a recharge depends on this, therefore it's a crucial factor to think about. It is desirable to have a system with a large energy capacity since it will allow for greater energy storage.

High energy capacity is necessary to guarantee a steady supply of electricity, for instance, in a remote area where power generation is unreliable. It's worth noting, though, that a greater energy output usually comes at a larger price.

The energy capacity should also be taken into account in relation to the system's power rating. A system that has a high energy storage capacity but a low power rating will be able to store a lot of energy but not be able to deliver it rapidly.

Cost. Because it will have such a large impact on the final price tag, energy storage system costs must be carefully considered. The total cost over time, including the initial investment and any necessary repairs or upgrades, must be taken into account.

The initial cost of an energy storage system varies substantially based on the technology employed, system capacity, and manufacturer. A lithium-ion battery system, for instance, will normally cost more than a lead-acid battery system. Finding the most cost-effective energy storage system necessitates comparing the prices of several options.

The price of repairs and upgrades must also be factored in. If you're in a pinch, an energy storage system that doesn't need as much TLC could be the way to go. Weighing the maintenance expense against the ease with which it may be performed is crucial.

Maintenance. The maintenance requirements of an energy storage system are important to consider, as you'll want to make sure you're able to keep the system running properly over time. Some systems require regular maintenance, such as adding distilled water to the cells or replacing electrolytes, while others are more low-maintenance. Consider the maintenance requirements and costs when making your decision.

Compatibility. It's crucial to think about what it'll need to keep an energy storage system in good working order over time, so you can budget accordingly. Some setups need regular upkeep, like topping off the cells with distilled water or swapping out the electrolytes, while others are much easier to take care of. When choosing a choice, keep upkeep expenses and needs in mind.

Selecting an energy storage system that works well with the rest of the system requires careful consideration of compatibility. The renewable energy source, such as solar panels or wind turbines, and the load, such as the electrical grid or an individual building's electrical system, must be compatible with one another.

Components can be damaged or operate poorly if they are not compatible with one another. Checking the energy storage system's specifications and speaking with the manufacturer or an expert will help guarantee that it will work with the rest of the system's parts.

Warranty. The warranty of an energy storage system is critical since it determines the system's level of protection against flaws or malfunctions. Your mind can rest easy if you purchase a product with a guarantee, because you know the manufacturer will fix or replace it if anything goes wrong. Before investing in a battery-based energy storage system, be sure to read up on the warranty's coverage and conditions.

Some warranties may only cover certain parts of the system, while others may have limitations on the type of defects or malfunctions that are covered. Additionally, it is important to consider the reputation of the manufacturer and their track record of honoring warranties in order to ensure that the system is protected in case of any issues.

Safety. The level of risk involved with employing an energy storage system is directly related to how secure the system is. There are potential dangers associated with energy storage devices, such as fire and electrical hazards. Verifying the system's security features and identification status is crucial.

Overvoltage protection and temperature management are just a couple examples of the safety features available on . A trustworthy safety agency, such as Underwriters Laboratories (UL) or the National Electrical Code (NEC), certification is also essential to guarantee the system satisfies safety requirements.

considerations when choosing an energy storage system

Critical factors include power rating, energy capacity, cost, maintenance, compatibility, warranty, and stability. The efficiency, affordability, and security of the energy storage system will all be influenced by these variables. Learn about the Top 50 Energy Storage Companies in 2023 by reading this article.

Bay Energy can offer its customers the most . ESS systems ranging from 5kW to 20kW are available. Bay Energy is the place to go if you're looking for a dependable wholesale manufacturer.

Current State of the Energy Storage Market

Understanding the energy storage market's current position, recent advancements, trends, and future projections is crucial. When you take into account all of this information, you'll be able to select the most appropriate energy storage solution for your requirements.

Market Overview

It is estimated that by 2028 the global market for energy storage systems would be worth USD 302 billion, up from its 2021 value of USD 191.4 billion. It is projected that the global market would expand at a CAGR of 7.9% during the next several years. Demand for renewable energy sources, the need to lower carbon emissions, and the proliferation of electric vehicles are all factors propelling the expansion of the energy storage market.

energy storage market size 2021 to 2028

Source: Data quoted from vantagemarketresearch

Battery energy storage is seen as a critical technology for developing a sustainable energy system. A can regulate voltage and frequency, reduce peak demand prices, integrate renewable energy sources, and provide emergency power. Due to grid modernization, lithium-ion battery penetration in the renewable energy sector, and the drive toward a low-carbon, fossil-fuel-free economy, the market is growing.

As industries want better grid management, load control, and power supply, energy storage systems are in demand. Environmental concerns, carbon footprint reduction, and the development of renewable energy sources will affect market growth. In addition, government initiatives to encourage the use of renewable energy sources are projected to play a significant role in propelling market expansion.

The most popular forms of renewable energy that are stored in grids are solar and wind power. However, the process of energy generation shifts when the sun is blocked by clouds or when wind patterns shift. These fluctuations call for the implementation of adaptable grid technologies for energy storage. The use of battery energy storage technology is growing as part of the effort to modernize the grid.

These methods help grid operators conserve energy when the supply of electricity is greater than the demand. As a result of incorporating these innovations, the electrical supply systems are now more stable and adaptable in terms of electric power generation, transmission, and distribution. As a whole, the energy storage market is expected to make significant contributions to the development of low-carbon power infrastructure.

Rapidest Ever Shift In Energy Source

Installing renewable energy sources like solar and wind is happening at a rate three times faster than any other new electricity source. The market data shows that PV and wind are the best options for adding new generating capacity because they are both viable and very inexpensive.

Renewable energy sources like solar and wind are being put in place 3 times faster than any other new source of electricity.

In other words, renewable energy sources like solar and wind are becoming a serious alternative to fossil fuels like coal and natural gas. Moreover, they can supply a sizeable percentage of the rising power demand, which is growing three times as quickly (2.7% yearly for the period 2011-21) as the global population.

There will soon be a new wave of “electrification,” or “tout-électrique,” as the expression is known. In order to accomplish this, the electric power will need to replace gasoline in cars, heat homes, and power factories. The effect will be a threefold increase in electricity use. As an added bonus, renewable energy sources like solar and wind will be able to meet this increased demand.

In just 20 years, worldwide solar installations have increased by a factor of 500. The total yearly production of PV modules was less than 25 MWp in 1985, when the current PV industry workhorse, PERC technology, was still a novelty that would take another 20 years to blossom. These days, multiple separate Tier 1 PV module producers crank out 25 MWp/day.

An average annual increase of 18% can be seen in the deployment rate during the past few years. The combined installed capacity of solar and wind power has surpassed 1 TW. The use of renewable energy sources like solar panels and wind turbines is rising rapidly.

The total installed solar capacity is quickly approaching, and will soon surpass, the total installed wind capacity. Installed solar capacity is expected to surpass the sum of nuclear, hydro, gas, and coal by 2031 if the current rate of expansion continues.

The World's Energy Trends

One of the most notable trends in the energy storage market is the increasing use of energy storage systems in microgrids. Microgrids are decentralized electrical networks that provide power to localized areas and can function in the absence of a central power source. Most of the time, they are used in remote or “off-grid” areas, but they are also being used in cities to make energy more reliable and less dependent on the main grid. Microgrids can't function without energy storage technologies, which collect and store power for later use.

microgrids power system

Another major trend in energy storage is the growing usage of energy storage systems in electric vehicles. The need for energy storage systems capable of powering EVs has been on the rise as the EV market has expanded. This is inspiring the creation of novel battery technologies and systems tailored to the needs of electric cars.

Markets for energy storage systems are expanding rapidly, providing opportunities for businesses and investors interested in fostering a more sustainable energy future. Despite obstacles, the market is predicted to expand over the next few years thanks to the rising popularity of electric vehicles and the development of energy management solutions, as well as the rising need for grid stability and the incorporation of renewable energy sources.


In developed places like Europe, North America, Japan, and Australia, each person uses between 7 and 15 MWh of electricity per year. To eliminate fossil fuels, electrification of transportation, heating, and industrial requires a doubling or more of electricity demand, depending on a country's role in the chemical industry. If this trend continues, wealthy countries' annual electricity usage per person may reach 20 MWh in the middle of this century.

The residential sector: is expected to be one of the key contributors to the growth of the energy storage market.  More and more people are looking into energy storage devices to store the power they create from solar panels and other renewable energy sources. This means they can utilize the power they produce just when it's needed, cutting down on their bills and their reliance on the grid.

residential energy storage battery system

The commercial and industrial sectors: are also likely to witness considerable expansion in the energy storage industry. In order to lower their energy bills and become more self-sufficient, businesses and industrial facilities are investing in energy storage systems. Energy storage systems can also help the grid out in other ways, such as with frequency regulation, which can aid with grid stability and reliability.

The utility-scale sector: is also expected to see significant growth in the energy storage market. As more utilities look to add renewable energy sources to their mix of power generation, they are also looking to install energy storage systems to help manage the fluctuations in output from these sources. Load shifting and peak shaving are two of the many useful services that energy storage systems can give to the grid.

In Conclusion

The expansion of the energy storage market is due in large part to the aforementioned factors, but technological advancements also play a crucial role. There is ongoing research and development into new battery chemistry and materials that will result in increased energy density, increased lifespan, and decreased cost. Thus, are being created that improve upon previous ones in terms of efficiency, dependability, and cost.

forecast about the energy storage market

As more and more people and organizations look to lessen their reliance on the grid and cut their energy bills, energy storage devices are rising in importance as a key component of clean energy strategy. There is a broad variety of energy storage systems on the market, so it's necessary to learn about the many possibilities, their characteristics, and their practical uses before making a purchase. 

Likewise, it's crucial to have a thorough familiarity with the energy storage sector, its history, and its future prospects. When you take into account all of this data, you'll be able to select the most appropriate energy storage solution for your requirements.