Author InfoLink
Updated September 22, 2023

Over the past two years, the energy storage industry has developed rapidly and gone through tumults across markets and supply chains, such as cell shortage, the war-induced energy crisis and electricity price surge, the influx of companies, the apace technology development, and the fast and comprehensive expansion of energy storage application. Most of the chaos ceased as the development of the market and the industry stabilized. Exhibitions this year saw exhibiting manufacturers and the products they displayed showing a consistent trend, indicating that the energy storage market has matured since last year. Based on findings and surveys at RE+ 2023, InfoLink concludes updates and trends of the world’s second-biggest energy storage market, the U.S. market.

Steady growth

ESS installations fell short of expectations in the second half of 2022 due to supply-demand issues and high-interest rates. This year, the market recovers thanks to stabilized supply-demand dynamics, prices returning to a normal range, new products and technologies springing up, and the maturity of policy frameworks, products, and business models. Meantime, legislations, such as the IRA and DERs, along with incentives provided by state governments, started boosting the market. During 2024 and 2025, falling equipment prices and supportive policies will accelerate the development of U.S. energy storage markey. However, C&I energy storage sees limited growth and requires more time to yield progress, given its premature market mechanism and suppliers failing to introduce effective profit models to manufacturers. The U.S. added 6.65 GWh, 0.5 GWh, and 1.1 GWh of installed energy storage capacity respectively in FTM, C&I, and residential markets in the first half of 2023. These figures may reach 21 GWh, 1.1 GWh, and 3 GWh by the end of this year, meaning a 100% increase in the second half of this year.

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Image: Forecast for ESS installations in different application scenarios in the U.S. in 2023

Energy storage equipment prices drop significantly

According to InfoLink’s Global Lithium-Ion Battery Supply Chain Database, global cell production capacity reached 1,400 GWh at the end of last year and will rise by 80% to 2,500 GWh at the end of this year, with energy-storage cells accounting for 15-20%, easily exceeding the shipment forecast of 210 GWh. Cell prices plummeted owing to the oversupply over the past six months. In China, prices for energy-storage cells will approach below RMB 0.5/Wh in the fourth quarter. Similarly, prices (FOB) for utility-scale DC ESS in the U.S. have declined to USD 150/kWh and will stay below that level over the coming six months. Even though low prices can stimulate market development and increase business competitiveness, the U.S. values verification, brand image, warranty, and O&M services. Plus, the U.S. has no local capacity for energy storage cells. Therefore, price wars like those in China are not likely in the U.S. in the near and mid-future.

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Image: Prices for utility-scale DC ESS in the U.S. (F)

Digitization and intellectualization

As the energy storage market and products mature, intellectual energy management systems become a key factor for raising earnings yield and utilization rates, as well as boosting the BTM market. For example, Tier-1 integrator Fluence stated that the complete use of its smart energy management system will increase ESS efficiency by 40%, even 70-80% in some cases. The addition of profits has exceeded the difference in initial investment.


Large-capacity cells not only cater to market trends but also display the technological strength of manufacturers. Currently, there are more than 30 types of cells on the market with a capacity of over 300Ah. This year, manufacturers mass-produced 306-Ah, 314-Ah, and 320-Ah cells. The production capacity of large-capacity cells will surge next year to over 200 GWh. With large-capacity cells, liquid cooling, high integration, and cell-to-chassis design, a 20-foot container can store up to 5 MWh of energy.

Local cell production capacity

Driven by the IRA, establishing battery pack and cell capacities in the U.S. has become a strategic move for cell manufacturers worldwide. As one of the biggest benefited South Korean manufacturers, LG plans to commission a 16-GWh pouch LFP cell production plant in 2026. Chinese manufacturers, such as Gotion, EVE, and Hithium, following the footsteps of CATL, also have expansion plans in the U.S. Still, these projects are still in the early stages. Materialization is subject to change, and commissioning takes another two to three years. InfoLink expects to see 60-70 GWh of production capacity for energy-storage cells in the U.S. in 2026, which is not much compared to the rest of the world. Previously focused on NCA/NCM cells, LGES shifted to LFP ones, indicating the latter's dominance in the industry.

As the industry begins to scale and mature, the convergence of the supply chain, market, and technology is not necessarily a bad thing and prevents the situation where inferior products drive out superior ones. Regional energy storage markets develop following a consistent trend, albeit at varying paces. For example, even though the C&I market in the U.S. is relatively small and posts slower progress, most cell, inverter, and system integration suppliers at the exhibition introduced corresponding C&I products, indicating that the development of C&I energy storage is a shared direction across the globe. Furthermore, the incorporation of software and hardware, which places greater emphasis on energy management, is gaining traction in China. A global trend in the energy storage market and technology becomes clear, which will undoubtedly bring faster and more stable development in the future.

Global Lithium-Ion Battery Supply Chain Database 2024

Database contains the global lithium-ion battery market supply and demand analysis, focusing on the cell segment in the ESS sector. We compile detailed data on various businesses' capacity, production, and shipments, as well as segmenting the market applications such as FTM, BTM-C&I, and BTM-Residential.

Learn more
Global Lithium-Ion Battery Supply Chain Database 2024

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