Emerging Innovation Trends in the Battery Storage and Inverter Market

 
For battery storage and inverter original equipment manufacturers (OEMs), it’s an exciting time. After installing 8.7 GWs of battery storage capacity in 2023 — a 90% increase over 2022 — the U.S. energy storage market continued its strong growth by setting a record in Q1 2024 with 1,265 MW deployed across all segments, an 84% increase from Q1 2023. The country is expected to deploy 12.9 GW across all segments in 2024. Meanwhile, the global inverter market size is forecast to expand at a 16.9% compound annual growth rate (CAGR) between now and 2028.
 
As the push to decarbonize intensifies, OEMs in the clean energy sector find themselves at a critical juncture, facing pressure to innovate and remain relevant while contending with market competition.
 
Let’s explore the top emerging innovation trends disrupting and re-shaping the industry, with insights on how OEM companies can capitalize on these to accelerate business growth.
 

Innovation Trend #1: Deploying Battery Storage and Inverters Beyond Traditional Applications

 
Battery storage and inverters are no longer confined to traditional applications like backup power and renewable energy integration. The landscape is expanding with innovative commercial and industrial applications for savings, resilience, and sustainability.
 

  1. Microgrids: Battery Energy Storage Systems (BESS) have become increasingly popular assets for microgrid integration to provide reliable power for businesses and in remote or underserved areas. These microgrids can operate independently or in conjunction with the main grid, ensuring continuous power supply during outages.

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  2. Energy Arbitrage: Businesses leverage BESS to engage in energy arbitrage, purchasing electricity during off-peak hours when prices are low and using stored energy during peak demand periods. This practice not only reduces energy costs but also alleviates stress on the grid.

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  3. Demand Response: BESS enables participation in demand response programs, where businesses can reduce or shift their energy usage during peak periods in response to grid signals for financial incentives to participants.

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Innovation Trend #2: Electric Vehicle (EV) Demand Drives Inverter Market

 
Advanced inverters and a BESS solution are crucial for integrating EV charging infrastructure, optimizing a fleet’s charge, and providing ancillary services such as frequency regulation and voltage support.
 
Surging EV demand and fleet electrification offer inverter OEMs a significant avenue for growth. According to the Global EV Outlook 2023, electric vehicles constituted 14% of all new vehicle sales in 2022, up from approximately 9% in 2021. This trend will create lucrative opportunities for vehicle inverter and BESS providers in the coming years.
 

Innovation Trend #3: Advanced System Modeling for Optimized Asset Performance

 
Accurate system modeling is becoming increasingly crucial for optimizing the control and performance of battery storage and inverter systems. Advanced system modeling techniques, such as machine learning and physics-based models, can help predict system behavior under various operating conditions, identify potential issues, and optimize control strategies. This can lead to improved performance, reduced downtime, and lower maintenance costs for end users.
 
Inverters and batteries paired with a control platform that uses machine learning to adjust instantly to weather and energy changes can optimize asset performance by dynamically predicting and responding to evolving conditions.
 
The key will be using the same algorithms and software for modeling and system control, enabling OEMs to win more accurate proposals that deliver the expected results.
 

Innovation Trend #4: Moving Toward More Modular Designs

 
There’s a major shift from centralized energy systems to modular and scalable designs, particularly for commercial and industrial applications.
 
Hybrid inverters that can manage multiple energy sources and storage systems will be in big demand. At the same time, a distributed and decentralized controller will be critical to integrate your assets into a modular design for greater flexibility and more effortless scalability. This technology-agonistic design provides more versatility and adaptability to unpredictable energy needs.
 
OEMs offering distributed storage solutions that are easy to install, operate, and maintain will be well-positioned to capture the growing modular design market.
 

Innovation Trend #5: Regulatory Changes and Cluster Projects Shake Things Up

 
Regulatory changes are always a big deal in the energy storage and inverter markets, and the latest one to watch is FERC Order No. 2023, issued in July 2023. This order aims to streamline the heavily congested interconnection process for new generating facilities and address the nationwide backlog holding up efforts to connect new resources to the grid.
 
For inverter and storage OEMs, this creates an opportunity to accelerate product deployment, increase demand, and create new market opportunities as the grid becomes more accommodating to innovative technologies. But it also means that OEMs may need to adapt their products and approach to align with new compliance requirements.
 
A noteworthy change is the introduction of a cluster study process for managing interconnection queues. This approach groups multiple projects together to streamline the interconnection process and reduce costs.
 
Collaboration will be essential for expedited requests, as OEMs will need to work with more stakeholders to capitalize on clustering projects together with similar ones to speed up interconnection.
 

Innovation Trend #6: Partnerships Offering Energy Solutions

 
As the energy industry becomes more advanced, partnerships between OEMs, energy solutions providers, utilities, and other stakeholders are becoming increasingly valuable for driving innovation and scaling up systems.
 
Partnerships can take many forms, from joint ventures and strategic alliances to technology licensing and co-development agreements. The key is to find partners that share your vision, values, and goals and bring complementary skills and resources to the table.
 
For OEMs, partnering with an energy solutions provider can provide access to a wide range of benefits, including:
 

  1. Technical expertise and innovation capabilities
  2. Market insights and customer relationships
  3. Financing and project development support
  4. Regulatory and policy advocacy
  5. Supply chain and logistics management

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By leveraging these partnerships, OEMs can accelerate their growth, reduce risks, and create more value for their customers and stakeholders.
 
Interested in learning about the benefits of partnering with Heila Technologies? Reach out and let’s discuss your new opportunities.