High-performance battery storage systems are considered one of the prerequisites for a successful energy transition. Despite considerable gains in recent years, the market still offers significant growth opportunities—but also risks. Medium-sized suppliers in particular are facing high demands, for example due to complex regulatory requirements. Following Part 1 on “Battery production in Europe: Between crisis and comeback,” enomyc authors Jan Holsten and Robert Schröder examine forecasts, framework conditions, and areas of application for battery storage systems in Germany in Part 2 of the series and show how companies can strengthen their financial and earning power in the long term.
The energy transition in Germany is moving forward: Between 2014 and 2024, the installed capacity of renewable energies rose by around 60 percent. For the years 2025 to 2035, industry experts anticipate further growth of around 50 to 70 percent – particularly in the areas of photovoltaics and offshore wind (see BMWK, 2025). However, the greater the share of these volatile generators, the more essential a high-performance storage infrastructure becomes. Without sufficient storage capacity, wind and solar power often have to be curtailed and go unused. In addition, significantly more renewable energy capacity must be installed to ensure an adequate power supply even in “bad” times, during so-called dark doldrums.
And that is important because, as an industrialized country, Germany depends on a stable power supply around the clock. This is not only a matter of cushioning peak loads in energy-intensive industries, but also of ensuring a reliable base load. Battery storage systems can act as buffers here by absorbing excess energy and releasing it when there is a shortage. By linking supply and demand more closely, they accelerate the transformation.
The expansion of battery storage to date will not be sufficient to efficiently support the predicted growth in renewables, either in terms of capacity or unit numbers. Studies indicate that the available storage capacity would have to at least triple to prevent significant bottlenecks. If this expansion falls short of expectations, supply bottlenecks and production cuts are likely, especially in energy-intensive sectors that have little leeway for volatile load management. This would not only slow down the energy transition, but also potentially harm industrial value creation and Germany's competitiveness.
Framework conditions for providers of battery storage systems
Overall, the battery storage market interacts closely with political, economic, and technological developments. Support programs at the federal and state levels provide incentives for operators and end customers. For example, the KfW (Kreditanstalt für Wiederaufbau) promotes the purchase of stationary battery storage systems through its “Renewable Energies – Storage” program. At the state level, Bavaria is providing targeted support for photovoltaic battery storage systems to optimize self-consumption as part of its “10,000 Houses Program.” Such measures reduce capital costs and make storage systems more attractive—provided that efficiency and documentation requirements are met.
At the same time, increasingly stringent environmental and recycling regulations mean that the effort required by companies to meet all compliance requirements is constantly rising. At EU level, the new Battery Regulation (EU) 2023/1542 has been in force since February 2024, which, among other things, stipulates stricter recycling quotas and more comprehensive CO₂ certification. In Germany, it will be implemented by the new Battery Act (BattDG), which will come into force in August 2025. The additional recycling quotas and more comprehensive CO₂ certification requirements will have a significant impact on profitability. The raw material prices for battery cells are particularly crucial for profitability. The rising demand for lithium, nickel, and cobalt can lead to bottlenecks and price spikes, while stricter supply chain regulations place an additional burden on smaller players in particular. Technological advances allow for higher energy densities and longer life cycles, but require ongoing investment in research and development. Companies that focus on new cell chemistries or alternative materials can effectively differentiate themselves from the competition.
The top five application areas for battery storage with the highest growth rates
The following areas are expected to offer the greatest growth opportunities for battery storage systems in the medium term:
- Optimization of own consumption in trade and industry: In view of rising electricity prices and growing pressure to reduce CO₂ emissions, more and more companies are turning to photovoltaics in combination with storage systems. This reduces procurement costs and makes companies less dependent on the public grid.
- Grid services and frequency stabilization: Battery storage systems help to balance out frequency fluctuations, thereby ensuring greater security of supply. Demand for these systems is growing because the grid is increasingly reliant on volatile feed-in sources as fossil fuels are phased out.
- Peak shaving: Large industrial consumers reduce cost-intensive peak loads by drawing energy from storage instead of the grid when there are short-term high power requirements. This saves them grid fees and reduces the risk of voltage fluctuations.
- Arbitrage and energy trading: Another advantage of storage systems is that they can be charged when prices are low and discharged when prices are high. They can be charged during periods of low prices and discharged during periods of higher prices. New trading models (e.g., via short-term electricity trading platforms) open up additional revenue potential, provided that providers have the necessary permits. they can be charged when prices are low and discharged when prices are higher. New trading models (e.g., via short-term electricity trading platforms) open up additional revenue potential, provided that suppliers achieve the corresponding economies of scale.
- Integration into charging infrastructure for electric mobility: The higher the proportion of electric vehicles, the greater the demand for charging stations. It is important to prevent the power grid from becoming overloaded. Fast charging processes with, for example, 800 V and 350 kW place a particular strain on the grid infrastructure, especially when several charging points are used simultaneously. Battery storage systems take on these peak loads and enable flexible charging processes.
According to the German Energy Storage Association, all five segments are growing by 20 percent or more annually. Providers should therefore tailor their business models and products as precisely as possible to these applications and ensure that they meet all relevant safety, automation, and monitoring requirements.
Opportunities, risks, and best practices
The opportunities in the battery storage sector—such as cost reductions in cell production, rising demand, and new revenue models—are obvious. However, it is precisely these trends that are attracting international competitors and putting pressure on prices. Those who focus exclusively on cheaper battery cells will not automatically increase their profits, but will easily find themselves in an intense price war.
Although economies of scale are important in the mass market, they do not replace the need for specialization and service expertise.
Medium-sized manufacturers in particular should therefore focus on differentiated strategies in order to maintain their competitive edge in the long term. Best practices include:
- Industry and customer proximity: Individually tailored solutions for demanding industrial customers (e.g., chemicals, automotive, mechanical engineering) create real added value. Close coordination with customers' production processes and a deep understanding of processes make suppliers sought-after partners.
- After-sales services: Maintenance contracts, remote monitoring, or ongoing training for customer teams—service packages like these create long-term relationships and strengthen trust.
- Quality and safety: Certifications in accordance with current standards and transparent handling of supply chains and recycling processes are seals of quality that positively influence purchasing decisions.
- Cooperation and partnerships: Strategic alliances with suppliers and energy providers help to spread costs, innovation risks, and market access risks.
One example of the successful implementation of the best practices outlined above is TESVOLT, a German specialist in commercial and industrial storage solutions. Among other things, the company focuses on modular storage concepts that can be flexibly integrated into existing infrastructures and places great emphasis on quality, service, and comprehensive consulting—factors that have made TESVOLT an established brand for battery energy storage in various industries.
Battery storage in energy trading
Energy trading via battery storage offers interesting revenue potential, especially for operators with larger capacities or in partnership with energy suppliers. The model: use low-price phases to charge and feed back into the grid when exchange prices are higher. The amount of profit depends on the price range resulting from electricity price volatility and on how effectively price forecasts, storage management, and marketing work together. In the long term, however, returns could decline as more players discover this market. Successful providers are therefore focusing on multi-use concepts and combining energy trading with other storage applications (e.g., grid services) to optimize utilization and profitability.
Battery storage: The basis for a successful energy transition and a competitive industry
Battery storage systems are an essential pillar of the energy transition. They can accelerate it by balancing the volatile output of wind and solar energy with the constant demand of a highly industrialized country. At the same time, it is becoming clear that if expansion fails due to a lack of capacity or insufficient economic viability, not only will the energy transition stall, but so too will the competitiveness of large parts of industry.
Small and medium-sized suppliers must meet rising demand, hold their own against growing competition, and comply with a multitude of legal requirements. Differentiating business models, R&D investments, and resilient partnerships are crucial to success.
