As the cost of lithium-ion batteries continues to fall, businesses gain a competitive edge with behind-the-meter energy storage.

They can deploy energy storage to avoid peak electricity rates and high demand charges. Storage technologies can also maximize companies’ use of renewable energy and help to improve the quality and responsiveness of their electrical systems. That’s all in addition to gaining a buffer against power outages.

Server hallway in the sky
The battery market has been accelerating rapidly, and the latest Long-Term Energy Storage Outlook report from Bloomberg New Energy Finance (BNEF) suggests that companies without their own batteries will be at a disadvantage as the trend takes hold.


Behind-the-meter energy storage

Behind-the-meter energy storage refers to small-scale battery arrays that are installed on the ratepayer’s premises.

According to BNEF, the behind-the-meter market will grow at a relatively slow pace through the 2020s, compared to utility-scale storage, but companies should be prepared to climb on board by the mid-2030s. BNEF emphasized the advantage for both business and residential customers:

“Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties. For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.”

If you caught that thing about earning fees, that’s a particularly interesting development for businesses.

Smart-grid technology is already enabling grid operators to aggregate small-scale renewable energy resources into a “virtual power plant,” helping to avoid the cost of building new utility-scale facilities. BNEF foresees that behind-the-meter batteries can provide a similar service.

Ideally, the aggregation of behind-the-meter batteries would help participating businesses offset their costs and help improve grid services throughout their host community:

“There is significant opportunity for energy storage to provide flexibility—to help balance variable supply and demand—and systems will undoubtedly be used in complex ways. Energy storage will become a practical alternative to new-build generation or network reinforcement. Behind-the-meter storage will also increasingly be used to provide system services on top of customer applications.”

Read more: Triple Pundit