Energy Storage Systems (ESS) Market
Visiongain has published a new report entitled Energy Storage Systems (ESS) Market Report 2025-2035 (Including Impact of U.S. Trade Tariffs): Forecasts by Installation Type (Front-of- the-Meter (FTM), Behind-the-Meter (BTM)), by Ownership Model (Utility-owned, Third-party-owned, Customer-owned), by Application (Grid Management, Peak Shaving, Load Following, Other), by End-user (Utility, Commercial & Industrial (C&I), Residential, Microgrids, Other), by Technology (Pumped Hydro Storage, Electro-chemical, Thermal Storage, Electro-mechanical, Hydrogen Storage, Other) AND Regional and Leading National Market Analysis PLUS Analysis of Leading Companies.
The global energy storage systems (ESS) market is estimated at US$29,041.8 million in 2025 and is projected to grow at a CAGR of 9.1% during the forecast period 2025-2035.
Impact of US Trade Tariffs
The global energy storage systems (ESS) market is pivotal in the transition to sustainable energy, facilitating grid stability and integration of renewable sources. However, recent U.S. trade policies, particularly tariffs on imported battery components, have introduced complexities that could influence market dynamics over the next decade. In 2025, the U.S. imposed significant tariffs on Chinese lithium-ion batteries and related components, citing national security and economic concerns. These measures have led to increased costs for ESS projects, prompting stakeholders to reassess supply chains and investment strategies. The market’s response to these tariffs will shape its trajectory through 2035.
Tariff Impact: V-shaped Recovery
A V-shaped recovery scenario envisions a swift rebound following a short-term downturn caused by tariffs. In this case, the ESS market would experience a brief period of disruption, followed by rapid growth as supply chains adapt and demand resurges.
Tariff Impact: U-shaped Recovery
Under a U-shaped recovery, the market would endure a more prolonged period of stagnation before gradually returning to growth. Extended cost pressures and slower adaptation of supply chains could delay recovery, with growth resuming in the late 2020s.
Tariff Impact: L-shaped Recovery
An L-shaped recovery represents a worst-case scenario in which the market suffers a significant and prolonged decline with minimal recovery through 2035. Persistent trade barriers and structural challenges could lead to lasting disruptions in the ESS sector.
Supportive Policy Frameworks and Financial Incentives
The growth of the global energy storage market is also closely tied to evolving policy landscapes and financial incentives that lower market entry barriers and de-risk investment. Governments and regulatory bodies across the world are recognizing the strategic importance of ESS in achieving carbon neutrality, and in turn, have implemented various support mechanisms to stimulate adoption.
In the United States, the Inflation Reduction Act (IRA) of 2022 significantly advanced the ESS sector by extending the Investment Tax Credit (ITC) to standalone storage systems for the first time. This landmark policy change has enhanced project economics and catalyzed a wave of new investments. Companies such as NextEra Energy and Stem Inc. are capitalizing on these incentives to scale up deployments across multiple states. In Europe, the EU Green Deal and Clean Energy Package have provided both funding and a regulatory framework that mandates member states to include storage in their national energy strategies. Additionally, China’s 14th Five-Year Plan outlines storage development targets and allocates subsidies for long-duration storage projects, further accelerating domestic innovation and deployment. These policy frameworks are not only encouraging the adoption of ESS but are also fostering competitive markets and technological diversification.
How will this Report Benefit you?
Visiongain’s 417-page report provides 129 tables and 214 charts/graphs. Our new study is suitable for anyone requiring commercial, in-depth analysis for the energy storage systems (ESS) market, along with detailed segment analysis in the market. Our new study will help you evaluate the overall global and regional market for energy storage systems (ESS). Get financial analysis of the overall market and different segments including installation type, ownership model, application, end-user, and technology, and capture higher market share. We believe that there are strong opportunities in this fast-growing energy storage systems (ESS) market. See how to use the existing and upcoming opportunities in this market to gain revenue benefits in the near future. Moreover, the report will help you to improve your strategic decision-making, allowing you to frame growth strategies, reinforce the analysis of other market players, and maximise the productivity of the company.
What are the Current Market Drivers?
Electrification and Decentralisation of Energy Systems
Another powerful force reshaping the ESS landscape is the global movement toward electrification and decentralized energy systems. As more sectors—ranging from transport to heating—transition to electric power, the demand for resilient and flexible energy infrastructure has intensified. At the same time, decentralization allows end-users to generate, store, and consume electricity locally, reducing transmission losses and empowering energy consumers.
Residential and commercial customers are increasingly adopting behind-the-meter energy storage systems in tandem with rooftop solar PV installations. In Australia, companies like Sonnen and Tesla have led the way in providing residential battery systems that allow users to store solar energy during the day for use at night, thereby reducing reliance on the grid. Enphase Energy, a U.S.-based company, has also made significant strides in microinverter and home energy storage technologies, supporting prosumer energy models. These decentralized setups contribute to grid stability while offering consumers energy independence and cost savings. When viewed alongside the rise in electric vehicles and smart appliances, it becomes clear that ESS plays a key role in managing new forms of demand and enabling seamless integration with distributed energy resources.
Modernisation of Aging Grid Infrastructure
Energy storage systems have also become instrumental in addressing the limitations of aging grid infrastructure across many developed and emerging economies. Traditional grids were not designed to accommodate distributed energy resources or bi-directional power flows. As energy demand patterns evolve and peak loads intensify, storage solutions are increasingly deployed to enhance grid flexibility, reduce transmission congestion, and improve overall reliability.
Utilities are now incorporating ESS into grid modernization strategies to provide services such as frequency regulation, voltage control, peak shaving, and black start capabilities. In the United Kingdom, the National Grid has contracted several battery storage projects for Enhanced Frequency Response (EFR), with players like EDF Renewables and Gresham House delivering these services. Similarly, in India, Tata Power is piloting grid-scale battery storage projects to reduce stress on overloaded transmission lines during peak hours in urban centers like Delhi and Mumbai. These applications underline how ESS is evolving beyond renewable integration to serve core infrastructure roles, reinforcing grid resilience and operational efficiency.
Where are the Market Opportunities?
Decentralised Energy and Grid Modernisation Initiatives
The shift toward decentralized energy systems, including microgrids, distributed generation, and community energy projects, presents another major opportunity for ESS. As utilities and municipalities modernize grid infrastructure, energy storage plays a pivotal role in enhancing resilience, reducing transmission congestion, and supporting load balancing at the local level.
This is particularly important in regions facing grid reliability issues or disaster risks. In California, companies such as Tesla and Sunrun are deploying residential and commercial battery storage systems that support grid operations and provide backup during power outages. Similarly, in remote or island communities across Southeast Asia and the Caribbean, energy storage is central to enabling reliable, off-grid renewable solutions. Grid modernization efforts also increasingly include battery storage as a non-wires alternative (NWA), helping utilities avoid expensive grid upgrades while meeting demand growth sustainably.
E-Mobility and Vehicle-to-Grid (V2G) Integration
The rapid adoption of electric vehicles (EVs) is creating a dual opportunity for the energy storage market: expanding demand for battery manufacturing and unlocking new grid services through vehicle-to-grid (V2G) capabilities. As millions of EVs enter the market, their aggregated battery capacity can be harnessed to provide grid stability, demand response, and peak shaving.
Companies like Nuvve and Fermata Energy are pioneering V2G platforms that allow EVs to discharge electricity back into the grid during high demand, effectively transforming vehicles into mobile storage assets. Automakers such as Ford (with the F-150 Lightning) and Nissan (with the Leaf) are integrating bidirectional charging features that enable V2G functionality. This convergence of transportation and energy sectors opens vast potential for ESS to expand beyond stationary applications, creating a dynamic and distributed storage ecosystem.
Competitive Landscape
The major players operating in the energy storage systems (ESS) market are Amber Kinetics, BYD Co. Ltd, CalMac Ferries Ltd, Engie SA, Evapco, Inc., Fluence Energy, Kokam Co., Ltd., LG Chemicals Inc, NEC Corporation, Saft Groupe SAS, Samsung SDI Co., Ltd, Schneider Electric SE, Tesla Energy Operations, Inc, Toshiba Energy Systems & Solutions Corporation, Wärtsilä Corporation, These major players operating in this market have adopted various strategies comprising M&A, collaborations, investment in R&D, regional business expansion, partnerships, and new product launch.
Recent Developments
Notes for Editors
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