Interview Synopsis

US battery storage – demand outlook and competitive landscape

  • Public Equity
  • Energy
  • North America

Grid-scale battery supply chain lead times experienced an “overreaction in the market” six months ago that has now begun to calm, according to an executive at Enel X Srl.

Battery supply chain costs begin to stabilise

In an Interview with Third Bridge Forum, the specialist said that there had been challenges sourcing lithium-ion for batteries. We were told that Tesla was previously achieving delivery on a battery in four months but this jumped to 14 months “almost overnight”. Orders are now being completed in 8-9 months, according to the specialist. 

The specialist said that cost increases have begun to “stabilise” over the past two months. The specialist believes they will continue dropping due to a reduction in gas and freight prices. We also heard the Inflation Reduction Act has had an “immediate reaction” in the market.   

Meanwhile, the specialist told us that safety features are a “big deal” for battery buyers. Recent battery fires in Arizona and Australia means that buyers are likely to favour companies with good safety features, we heard. Software is also important for managing energy storage, according to the specialist. They added, “if you don’t have good software, you just have a big paperweight”. 

The specialist said that reducing costs and company mandates related to hitting carbon-neutrality goals are driving customer interest in battery storage. We heard there are two types of batteries – behind-the-meter (BTM) and front-of-meter (FTM). They said BTM batteries can usually trim 25-50% off demand and are best for “spiky load” usage – when operations are turned and off – like rock crushing, food, winemaking, bakeries and smelters. They are not as effective for flat load usage like grocery stores and office blocks, according to the specialist.

FTMs are bigger, simpler, easier to monitor with software and have more predictable charge and discharge patterns. We heard they are being used for utility-scale projects, which tend to be bigger than BTMs.

The home storage market is growing through companies like Neovolta, Yotta and Generac, which recently acquired rival Pika. The specialist told us that whichever company can design a system that integrates battery and home solar first will hold an advantage over others, with the specialist speculating it could be Yotta.  

Click here to access all the human insights in Third Bridge Forum’s “US Battery Storage – Demand Outlook & Competitive Landscape” Interview.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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