Solar Battery Energy Storage System Market

Market Definition

The solar battery energy storage system (BESS) market includes technologies, solutions, and services that enable the storage of electricity generated from solar photovoltaic (PV) systems. It covers storage units deployed across residential, commercial, industrial, and utility-scale projects, spanning different battery chemistries, capacities, system configurations, and use cases.

Solar BESS Market Overview

The global solar BESS market size was valued at USD 5.49 billion in 2024 and is projected to grow from USD 6.65 billion in 2025 to USD 29.43 billion by 2032, exhibiting a CAGR of 23.68% over the forecast period.

Major companies operating in the global solar BESS market are BYD, Canadian Solar, CATL, Enphase Energy, Fluence, GE Vernova, LG Energy Solution, Neoen, NextEra Energy, Panasonic Energy, Samsung C&T Corporation, SolarEdge, Sonnen, Sungrow Power Supply, and Tesla Energy.

Key Market Highlights:

1. The global solar BESS market was valued at USD 5.49 billion in 2024.
2. The market is projected to grow at a CAGR of 23.68% from 2024 to 2032.
3. North America held a market share of 31.54% in 2024, with a valuation of USD 1.73 billion.
4. The lithium-ion batteries segment secured USD 4.09 billion in revenue in 2024.
5. The above 30kWh segment is expected to reach USD 14.08 billion by 2032.
6. The on-grid segment garnered USD 3.95 billion in revenue in 2024.
7. The utility-scale segment is expected to reach USD 13.74 billion by 2032.
8. Asia Pacific is anticipated to grow at a CAGR of 26.41% during the forecast period.

The solar BESS market is growing due to the increasing adoption of renewable energy and strong policy support for solar integration. Rising grid instability, energy access challenges in remote regions, and demand for peak shaving and load shifting are encouraging the deployment of solar-plus-storage solutions such as residential rooftop PV paired with home batteries, commercial systems integrating solar with storage for demand management, and utility-scale solar farms combined with grid-scale batteries for grid stability.

Technological improvements in lithium-ion and alternative battery chemistries have lowered costs and improved efficiency. Supportive government incentives, net metering, and tax credits are accelerating investments in solar energy storage systems across key regions.

• According to IRENA, 2023 recorded an addition of 473 GW of new renewable energy capacity, globally up from 295 GW in 2022. Solar accounted for ~73% of this growth (~346 GW), raising the global cumulative solar PV capacity. This scale of solar deployment underscores the growing need for integrated storage solutions.

Market Driver

Robust Public Sector Support and Incentives to Promote Grid Resilience

Growth of the solar BESS market is driven by strong government incentives and the increasing need for grid resilience. Policies such as the US Investment Tax Credit (ITC), Japan’s storage subsidies, and India’s solar-plus-storage tenders are creating favorable investment conditions. 

These initiatives have strengthened the financial viability for deployment across end-use segments. Additionally, rising grid instability caused by extreme weather and supply-demand mismatches has increased the demand for reliable backup and peak load solutions. 

Solar BESS is emerging as a central component for strengthening energy reliability and enhancing flexibility, with particular relevance to distributed and decentralized energy systems.

• In June 2025, the Solar Energy Corporation of India (SECI) launched a competitive tender to deploy 1.2 GW of solar PV hybridized with 600 MW/ 3.6 GWh of battery energy storage systems (BESS).

Market Challenge

High Upfront Installation Costs Associated with BESS Systems

A major challenge for the solar BESS market is the high upfront cost, particularly for residential and small commercial segments. Leading players are responding by introducing modular and scalable storage systems that reduce installation expenses and improve compatibility with existing infrastructure. 

To navigate non-uniform policies and limited returns from ancillary services, companies are aligning with utilities and regulators to develop standardized participation models and revenue streams. To alleviate cost barriers, governments are adopting supportive mechanisms.

• In December 2023, India’s Ministry of Power approved a Viability Gap Funding (VGF) scheme covering up to 40% of capital costs for 4,000 MWh BESS capacity. 

Financial innovations such as third-party ownership, leasing, and community-based storage programs are being advanced by developers and service providers to lower adoption barriers. 

At the same time, battery manufacturers are accelerating cost reductions through supply chain optimization and investments in next-generation chemistries beyond lithium-ion, thereby strengthening the long-term cost-benefit proposition for customers and investors.

Market Trend

Increasing Demand for Modular and Scalable Energy Storage Solutions

The solar BESS market is witnessing an increasing demand for modular and scalable energy storage solutions that can adapt to a wide range of solar applications. End-users across residential, commercial, and utility-scale segments are seeking systems that offer flexible deployment, easy capacity expansion, and streamlined integration. 

This is driven by the need to match storage capacity with variable solar output and evolving load profiles. Modular architectures enable phased investments and operational agility, while scalability supports small-scale installations and large grid-connected projects. As a result, manufacturers are focusing on standardized and interoperable designs to meet the growing preference for customized deployment models.

• In June 2025, Cummins India Limited launched its Battery Energy Storage Systems (BESS), expanding its clean energy portfolio. The modular solution, built on lithium ferrophosphate batteries, supports various applications such as manufacturing, data centers, commercial realty, and mining  through scalable containerized units. It includes liquid cooling, safety certifications, and plug-and-play features. The system aims to integrate renewable energy sources and address the growing energy reliability needs across industries such as manufacturing, data centers, and commercial real estate.

Solar BESS Market Report Snapshot

Market Segmentation

• By Battery Type (Lithium-ion Batteries, Lead-acid Batteries, Flow Batteries, Nickel-based Batteries, and Others): The lithium-ion batteries segment earned USD 4.09 billion in 2024, supported by high energy density, longer lifecycle, and suitability for a wide range of solar storage applications.
• By Capacity (Below 10kWh, 10–19kWh, 20–29kWh, Above 30kWh): The above 30kWh segment accounted for 37.25% of the market in 2024, driven by its role in supporting grid stability, peak load management, and large-scale renewable integration for utility and commercial applications.
• By Connection Type (On-grid, Off-grid, and Hybrid Systems): The on-grid segment is projected to reach USD 22.74 billion by 2032, attributed to its role in enhancing grid stability and enabling time-shifted energy use in solar-connected environments.
• By Application (Residential, Commercial & Industrial, and Utility-scale): The utility-scale segment is anticipated to reach USD 13.74 billion by 2032, highlighting its integration in large solar infrastructure aimed at supporting load management and renewable energy reliability.

Solar BESS Market Regional Analysis

Based on region, the global solar BESS market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

Asia Pacific solar BESS market share stood at 36.75% in 2024, valued at USD 2.02 billion. The region led the global market, with China contributing significantly through large-scale solar deployments. China’s utility-scale solar capacity surpassed 880 GW, with 277 GW added in 2024 and over 720 GW in the pipeline, including the 100 GW Great Solar Wall project in Inner Mongolia. 

Countries such as India, Japan, and Australia advanced solar-plus-storage adoption through national renewable targets, grid modernization, and government-backed tenders. 

Growth across Asia Pacific is supported by a strong lithium-ion battery manufacturing ecosystem, rising urban electricity demand, and decarbonization commitments, which are driving investment in modular and scalable solar BESS solutions.

North America is poised for significant growth at a robust CAGR of 22.96% over the forecast period. This expansion is driven by incentives such as the Inflation Reduction Act and Investment Tax Credit (ITC), combined with state-level mandates, promoting clean energy and grid resilience. 

The region faces challenges related to power outages and peak load management, encouraging utilities and businesses to deploy solar-integrated storage systems.

• According to the U.S. Energy Information Administration (EIA), electricity demand in the Lower 48 states set new records on July 28 and 29, 2025, reaching 759,180 MW due to extreme heat and structural demand growth. The EIA projected electricity demand from the power sector to grow at 2% annually in 2025 and 2026, particularly in regions with expanding data center and manufacturing infrastructure.

Advancements in grid-scale and distributed energy solutions, along with rising residential participation in solar backup systems, are significantly contributing to the market growth across the U.S. and Canada.

Regulatory Frameworks

• In the U.S., the Federal Investment Tax Credit (ITC) enables the pairing of vstorage systems with solar to qualify for tax credits, boosting solar BESS deployment.
• In Europe, the EU Renewable Energy Directive supports energy storage as a key enabler of the energy transition.
• In India, the MNRE (Ministry of New and Renewable Energy) has issued guidelines and tenders for solar-plus-storage projects, especially in remote and off-grid regions.
• In Japan, the government provides subsidies for residential solar and storage systems to support energy self-sufficiency.
• In China, the National Energy Administration mandates the integration of storage in new solar power plants to enhance grid stability.

Competitive Landscape

The global solar BESS market is highly moderately fragmented with major companies pursuing partnerships, acquisitions, and regional expansions to enhance their market position. Market players are investing in advanced battery chemistries and improved system integration to meet evolving energy storage needs. 

These strategies aimed to support flexible deployment models, lower costs, and boost system efficiency, enabling players to respond to increasing demand across residential, commercial, and utility-scale solar energy applications.

• In March 2025, Cummins introduced new Battery Energy Storage System (BESS) solutions in its global portfolio. The products featured lithium ferrophosphate batteries, liquid cooling, and integrated fire safety systems. The BESS targeted off-grid, energy management, and critical infrastructure use cases across industrial, commercial, and institutional sectors.

Key Companies in Solar BESS Market:

• BYD
• Canadian Solar
• CATL
• Cummins
• Enphase Energy
• Fluence
• GE Vernova
• LG Energy Solution
• Neoen
• NextEra Energy
• Panasonic Energy
• Samsung C&T Corporation
• SolarEdge
• Sonnen
• Sungrow Power Supply
• Tesla Energy

Recent Developments (M&A/Partnerships/Agreements/New Product Launch)

• In May 2025, CATL introduced the TENER Stack, a 9 MWh energy storage system designed for large-scale deployment. Unveiled at ees Europe 2025, the system offers improvements in energy density, transportability, and space utilization. It supports various AC-side configurations and complies with transport regulations through a split design. The solution aims to reduce construction and logistics costs while meeting advanced safety and thermal management standards for diverse global energy storage applications.
• In May 2025, Canadian Solar, through its subsidiary e-STORAGE, launched the SolBank 3.0 Plus battery energy storage system at Intersolar Europe. The product features improvements in LFP battery cell design, enabling a 25-year lifespan, reduced degradation, and enhanced energy throughput. Additional upgrades included improved cooling, safety systems, and active cell-level balancing. These enhancements aim to support long-term operational efficiency in utility-scale energy storage projects.
• In June 2025, Cummins launched a containerized Battery Energy Storage Systems (BESS) product line ranging from 200kWh to 2MWh. Developed by its New Energy Solutions team, the systems offer AC output and are designed for applications like off-grid power, peak shaving, EV charging, and microgrids. The units feature liquid cooling and multi-level fire safety, meeting key international 50 Hz standards across various industrial, commercial, and critical infrastructure use cases.