Analyst Insight: Residential Energy Storage Deployments Skyrocket

As energy storage systems’ (RESS) costs decrease, deployments in residences are skyrocketing. Utilities and other third parties are deploying behind-the-meter (BTM) energy storage, and linking existing RESS systems, to form virtual power plants (VPPs) capable of bidirectional distribution in times of peak electrical demand. Innovative power conservation and sharing enables cost savings to reach utilities and customers; lessens demand on traditional transmission and distribution (T&D) infrastructure; and reduces the need for additional costly or sometimes impossible construction. Increased home and grid efficiency can also aid national decarbonization goals, especially when combined with residential renewable energy generation.

As battery technology improves and distributed energy resource management (DERM) technologies permit greater system flexibility, deployments and use cases are expected to increase. Decreasing technology costs will additionally enable battery storage to become a standard for greenfield construction and residential refurbishment. Residential energy storage paired with renewable generation, such as rooftop PV, is a market segment encouraged by national legislative action that will define the grid’s future. 

This Guidehouse Analyst Insight covers the rapidly accelerating residential energy storage deployment market—including market inflection trends, market drivers and barriers, a regional overview, impact of the Inflation Reduction Act (IRA), and emerging bidirectional EV charging—before giving recommendations for stakeholders in the energy storage industry.