As energy markets become more volatile and businesses push toward greater electrification, interest in battery energy storage systems (BESS) has accelerated. The BESS market expanded by 44% in 2024↗, and Wood Mackenzie estimates↗ that BESS will be the second-largest power capacity addition across Europe, the United States, and Asia-Pacific over the coming decade.
Meanwhile, battery storage costs dropped by nearly 20% in 2024, amid oversupply and an ongoing price war. Experts estimate this trend will continue. Battery container costs could fall by almost 40% by 2030, according to Wood Mackenzie↗.
Combined with solar PV, which already offers the lowest levelized cost of electricity, declining battery costs mean hybrid onsite solar and storage solutions will become one of the lowest-cost and reliable forms of electricity by 2035.
Yet despite the momentum, the economics of storage can still feel complex and difficult to assess. Not every site benefits equally from storage, and not every system delivers the same value. The key is understanding the value stack and identifying which components apply to your operations.
Understanding the battery value stack
A modern battery energy storage system creates multiple layers of value. When a system is designed to harness all relevant layers, instead of just one, the economics strengthen dramatically.
1. Peak demand shaving
Many commercial tariffs include large charges based on maximum demand, not solely total consumption. Even a short-lived spike from equipment start-up or production surges can lock in elevated demand charges for an entire billing cycle.
A storage system can discharge during these costly intervals, flattening your load profile, lowering coincident peak charges, and protecting your site from volatile wholesale prices. For energy-intensive facilities, demand reduction is often the most predictable and substantial economic benefit of storage.
2. Time-of-use arbitrage
Electricity prices can vary throughout the day. Midday tends to be cheaper due to abundant solar generation feeding the grid, while late afternoon and early evening prices rise sharply as demand grows.
A battery energy storage system can capture lower-cost electricity and discharge it during high-price periods. Time-of-use arbitrage improves cost predictability and helps businesses manage the financial impact of peak pricing. Where applicable, this value stack can enhance the benefits realized by a BESS.
3. Operational resilience
When there’s a power outage or other grid disruption, a building with onsite solar, coupled with onsite battery storage, can continue to operate critical systems like lighting, security, and communications. This capability is crucial for critical infrastructure, such as hospitals, data centers, and industrial facilities, where power continuity is essential.
Researchers at Cornell University found that the vulnerability of the U.S. power system has consistently been increasing over the past 10 years. Among the 3,022 US counties included in the report, an average of 999.4 outages↗ were experienced over the course of the decade, with disruptions occurring approximately every week.
Critical systems commonly supported by BESS include:
- Control and automation equipment
- IT infrastructure
- Refrigeration or environmental controls
- Safety, lighting, or essential manufacturing lines
Full-site backup often requires oversized, costly battery systems, hurting economics, but partial backup - where a BESS covers only mission-critical loads - can be far more cost-effective and deliver significant operational value. A National Renewable Energy Laboratory (NREL) analysis↗ found that when the value of avoided outage costs is included, solar and storage systems that previously weren’t economical become viable.
Even short-duration support can protect sensitive operations and reduce downtime.
When battery storage makes economic sense
The financial case for a battery energy storage system depends on factors specific to your site. The three most influential factors to consider are tariff structure, load profile, and available incentives.
Tariff structures - Storage delivers the strongest return in markets with high-demand charges, pronounced time-of-use pricing, or wide spreads between peak and off-peak rates. These conditions allow storage to capture multiple layers of value simultaneously.
Site load profile - Facilities with sharp peaks, energy-intensive processes, or operational sensitivity to outages tend to gain the most from BESS. Conversely, sites with flat consumption patterns or minimal peak/off-peak differences may see more limited economic benefit.
Available incentives – In the United States, many states offer government incentives and subsidies that can reduce upfront costs and improve the financial viability of BESS projects. These are in addition to the federal government’s tax incentives via the Inflation Reduction Act.
These incentives, combined with utility demand charge savings and access to utility revenue programs, can provide a strong return on investment in certain situations.
Global policy changes and incentives increase BESS ROI
Global incentives for battery storage continue to expand, improving project viability across multiple regions. In the United States, storage is now eligible for the federal Investment Tax Credit (ITC) through 2035. This long-term certainty enables businesses to plan projects with confidence and significantly lowers upfront capital costs.
More than 100 countries now have carbon pricing or net-zero targets, reinforcing the global shift toward onsite renewables. In Europe, where non-commodity costs can make up over 50% of the bill, solar can not only lower the commodity cost, but it may enable businesses to completely avoid them by generating and consuming electricity onsite.
Spain has declared storage as a public utility, to allow an easier fast track for permitting, and is also granting some exemptions for environmental assessments for projects using solar generation and storage. France’s TURPE7 unlocks better grid injection tariffs and location-based incentives, boosting returns for batteries in high-renewable zones.
These policy and incentive changes strengthen the case for BESS by lowering barriers, improving payback, and positioning storage as a critical asset in long-term energy planning.
Determining whether storage is right for your site
The most effective way to evaluate storage is through a site-specific feasibility assessment. A comprehensive analysis typically includes:
- Load profile analysis
- Local tariff structure evaluation
- Frequency and magnitude of peak demand review
- Solar generation modeling
- Resilience requirements discussion
- Available incentives research
- Capital strategy and operational priorities coaching
An assessment identifies which components of the value stack apply to your site and whether BESS can deliver measurable financial and operational benefits.
Transform energy from a cost center to a strategic opportunity
Energy management is undergoing a fundamental shift as businesses move from passive consumption to active oversight of their energy use. A battery energy storage system accelerates this transition by strengthening resilience, enhancing cost predictability, and reducing exposure to price volatility.
If your organization is evaluating onsite solar or storage, the first step is to assess your site as a strategic asset. A tailored feasibility study can quantify savings opportunities, assess technical potential, and determine the system configuration that delivers the greatest value.
How World Kinect can help
World Kinect’s energy experts help organizations evaluate onsite solar and storage through detailed technical and economic modeling. Our team can review a detailed projection of the economics, ROI, and potential savings with your team to determine the right solution for your facility.
Battery energy storage system FAQs
Q1: What are the benefits of pairing solar with battery storage?
Pairing solar with battery storage allows businesses to capture more value from their onsite generation. Benefits include reducing peak demand charges, arbitraging time-of-use pricing, and providing backup power during outages. When combined, solar and storage also improve grid independence and make energy costs more predictable—turning energy management into a strategic advantage.
Q2: Is battery storage financially viable for commercial use?
Yes—battery storage can be financially viable, particularly in regions with high demand charges, steep peak/off-peak price differences, or exposure to volatile wholesale markets. Incentives, tariff structures, and your facility’s load profile all influence ROI. When designed for the right applications, storage can deliver meaningful long-term savings.
Q3: How long can a battery system power my facility during an outage?
Backup duration depends on the size of the battery and the critical loads being supported. Most commercial systems are designed for short-duration backup to maintain essential operations—such as IT, lighting, controls, and safety systems. Larger systems can extend backup capability, but the most economical designs typically focus on supporting mission-critical equipment rather than an entire site.
Q4: What incentives are available for battery storage?
In the U.S., standalone storage qualifies for the federal Investment Tax Credit through 2035, providing a significant reduction in upfront capital costs. Europe is expanding support as well, with countries like Spain and France offering fast-track permitting, flexibility incentives, and location-based programs that improve returns. Many regions are also creating markets that reward demand reduction and grid support—further strengthening the economic case.
Q5: Can battery storage help reduce my electricity bill?
Yes. Storage lowers costs by charging when electricity prices are low and discharging when prices rise, reducing both energy and demand charges. For sites with time-of-use pricing or high demand peaks, a properly sized system can create substantial, predictable monthly savings.
Q6: Does a battery system require major changes to my existing electrical infrastructure?
Most commercial installations integrate with existing equipment. A feasibility assessment identifies any upgrades needed to support safe and efficient operation.
Q7: What is the best way to evaluate if storage is right for my site?
A site-specific feasibility study is the most effective way to determine whether storage is a strong fit. This analysis examines your load profile, tariff structure, operational priorities, and available incentives to model financial outcomes. The results provide clear insight into how storage would perform for your facility.
