Battery energy storage systems (BESS) are becoming key to solving the challenges of renewable energy, the International Renewable Energy Agency (IRENA) reports. Solar and wind power don’t produce electricity all the time—solar panels work only in daylight, and wind turbines depend on weather. As renewables join power grids, storing energy to use when needed has become crucial.
Batteries help by storing extra power when renewables produce more than people use. Then they release that energy when demand rises or production drops. This lets grids rely more on clean energy without losing rhythm.
Since 2018, energy shifting—storing power when prices are low and using it at peak times—has been the main driver for adding batteries. In 2024, this made up two-thirds of new battery capacity added.
There are two main battery types: large utility-scale systems hooked to power networks and smaller behind-the-meter batteries used by homes and businesses, often with rooftop solar. Utility batteries help stabilize the grid, while smaller ones reduce bills and provide backup.
Battery prices have dropped fast in the last 15 years, thanks to better technology and more production worldwide. From 2010 to 2024, prices fell nearly 93%, with more decreases last year. Lithium-ion batteries lead the market because they work well and last longer. Within that group, lithium iron phosphate batteries have grown popular in big projects for their lower cost and safety.
Prices for key materials like lithium and cobalt have stayed steady or dropped as new mines and factories opened, helping keep battery costs low.
As battery costs fall, pairing storage with renewable power becomes more affordable and reliable. With the right policies, battery storage can play a big role in building a cleaner energy future.
