Decentralized Battery Storage

Detailed overview of innovation with sample startups and prominent university research

What it is

Decentralized battery storage involves deploying smaller-scale battery systems at the distribution level of the electricity grid, closer to the point of consumption. This approach contrasts with centralized grid-scale battery storage, where large battery systems are connected to the transmission grid or substations. Decentralized battery storage offers several advantages, including improved grid resilience, reduced transmission losses, and increased flexibility for local energy management.

Impact on climate action

Decentralized Battery Storage under the Battery Storage theme revolutionizes climate action by enabling distributed renewable energy integration. By storing excess renewable energy locally, these systems enhance grid stability, reduce reliance on fossil fuels, and accelerate the transition to a resilient, low-carbon energy system, mitigating climate change impacts.


  • Battery Technologies: Decentralized battery storage systems can utilize various battery technologies, including lithium-ion, flow batteries, and sodium-ion batteries, depending on the specific application and requirements.
  • Distributed Energy Resources (DERs): Decentralized battery storage is often paired with DERs, such as rooftop solar panels and electric vehicles, to create local energy systems that can operate independently or in conjunction with the main grid.
  • Microgrids: Microgrids are small-scale, localized energy systems that can integrate DERs and battery storage to provide energy resilience and security to local communities or facilities.
  • Smart Inverters: Smart inverters with advanced grid-support functions can help to stabilize the grid and improve the integration of battery storage systems.
  • Energy Management Systems (EMS): EMS optimize the operation of decentralized battery storage systems, managing charging and discharging cycles, and ensuring efficient energy utilization and grid stability.

TRL : 7-8

Prominent Innovation themes

  • Residential Battery Storage Systems: Companies are developing and marketing residential battery storage systems that allow homeowners to store excess solar energy and use it during peak demand periods or outages.
  • Commercial and Industrial Battery Storage: Battery storage systems are being deployed in commercial and industrial buildings to reduce peak demand charges, improve energy resilience, and support renewable energy integration.
  • Virtual Power Plants (VPPs): VPPs aggregate and manage distributed energy resources, including decentralized battery storage, to provide grid services and enhance grid stability.
  • Community Energy Storage: Community energy storage projects allow multiple households or businesses to share a battery storage system, reducing costs and increasing access to energy storage benefits.
  • Second-Life Battery Applications: Used EV batteries can be repurposed for decentralized battery storage applications, extending their lifespan and providing a cost-effective solution.

Other Innovation Subthemes

  • Integration with Renewable Energy Sources
  • Grid Resilience Enhancement
  • Peak Demand Management
  • Microgrid Development
  • Cost-effective Second-Life Applications
  • Advanced Battery Technologies
  • Grid Stability Solutions
  • Smart Inverter Technologies
  • Community-Based Energy Storage
  • Resilient Energy Systems for Critical Infrastructure
  • Energy Independence for Remote Areas
  • Grid Optimization Strategies
  • Commercial Sector Resilience Solutions
  • Residential Energy Independence
  • Decentralized Grid Support Functions

Sample Global Startups and Companies

  1. sonnen:
    • Technology Enhancement: sonnen specializes in decentralized battery storage systems, offering residential and commercial energy storage solutions. Their systems integrate lithium-ion batteries with intelligent energy management software, enabling users to store excess solar energy for use during peak demand periods or in the event of a grid outage. sonnen’s technology enhances grid flexibility and supports the integration of renewable energy sources.
    • Uniqueness of the Startup: sonnen stands out for its focus on community-driven energy solutions and its innovative approach to decentralized battery storage. Their systems can be aggregated into virtual power plants (VPPs), allowing users to participate in energy trading and grid services. sonnen’s emphasis on energy autonomy, resilience, and sustainability sets it apart in the decentralized energy storage market.
    • End-User Segments Addressing: sonnen serves residential homeowners, businesses, and communities seeking reliable, self-sufficient energy solutions. Their decentralized battery storage systems are deployed in off-grid applications, grid-connected homes, multifamily dwellings, and commercial buildings, providing backup power, energy optimization, and grid support services.
  2. Enphase Energy:
    • Technology Enhancement: Enphase Energy specializes in microinverter and battery storage technology for residential solar installations. Their Enphase Ensemble™ energy management system integrates solar inverters with lithium-ion batteries, enabling homeowners to store and manage solar energy efficiently. Enphase’s technology enhances system reliability, energy independence, and grid stability.
    • Uniqueness of the Startup: Enphase Energy stands out for its focus on modular and scalable energy solutions tailored for residential solar installations. Their microinverter-based approach allows for granular control and optimization of solar energy production and storage at the individual panel level. Enphase’s emphasis on simplicity, reliability, and ease of installation has made it a leading player in the residential energy storage market.
    • End-User Segments Addressing: Enphase Energy serves residential homeowners and solar installers seeking integrated solar and battery solutions. Their decentralized battery storage systems are deployed in grid-tied residential properties, enabling homeowners to maximize self-consumption, reduce electricity costs, and enhance energy resilience.
  3. Generac Power Systems:
    • Technology Enhancement: Generac Power Systems is known for its backup power solutions, including residential and commercial standby generators and battery storage systems. Their Generac PWRcell™ energy storage system combines lithium-ion batteries with intelligent energy management software, providing homeowners with backup power and energy management capabilities. Generac’s technology enhances energy resilience and grid independence.
    • Uniqueness of the Startup: Generac Power Systems stands out for its expertise in standby power solutions and its entry into the residential energy storage market. Their PWRcell™ system offers homeowners a reliable and cost-effective alternative to traditional backup generators, with the added benefit of solar integration and energy optimization features. Generac’s reputation for reliability and innovation positions it as a key player in the decentralized battery storage market.
    • End-User Segments Addressing: Generac Power Systems serves residential homeowners, businesses, and installers seeking backup power and energy storage solutions. Their decentralized battery storage systems are deployed in grid-connected homes, off-grid properties, and commercial buildings, providing backup power, energy optimization, and grid support services.

Sample Research At Top-Tier Universities

  1. Massachusetts Institute of Technology (MIT):
    • Research Focus: MIT is at the forefront of research on Decentralized Battery Storage, focusing on developing advanced battery technologies, grid integration solutions, and decentralized energy management systems to enhance the resilience, reliability, and efficiency of distributed energy storage networks.
    • Uniqueness: Their research involves the development of novel battery chemistries, materials, and manufacturing processes for high-performance, low-cost energy storage systems suitable for decentralized deployment. They also explore intelligent control algorithms, predictive analytics, and peer-to-peer energy trading platforms to optimize battery operation, maximize self-consumption, and enable grid balancing at the local level.
    • End-use Applications: The outcomes of their work have applications in residential, commercial, and industrial sectors, enabling off-grid electrification, peak shaving, demand response, and renewable energy integration. By advancing decentralized battery storage technologies, MIT’s research contributes to building more resilient and sustainable energy infrastructure, reducing carbon emissions, and enhancing energy access worldwide.
  2. Stanford University:
    • Research Focus: Stanford University conducts pioneering research on Decentralized Battery Storage, leveraging its expertise in electrochemistry, materials science, and energy systems engineering to develop innovative approaches for distributed energy storage deployment and optimization.
    • Uniqueness: Their research encompasses the development of advanced battery architectures, redox flow systems, and hybrid energy storage technologies tailored for decentralized applications. They also investigate grid-edge control strategies, distributed energy management algorithms, and cybersecurity solutions to enable seamless integration of decentralized battery storage into existing power networks.
    • End-use Applications: The outcomes of their work find applications in microgrids, community energy projects, and electrification initiatives in remote or underserved areas. By advancing decentralized battery storage solutions, Stanford’s research supports energy access, resilience, and sustainability goals, empowering communities to harness clean and reliable power for economic development and social welfare.
  3. University of California, San Diego (UCSD):
    • Research Focus: UCSD is engaged in innovative research on Decentralized Battery Storage, leveraging its expertise in energy storage systems, grid integration, and renewable energy technologies to develop scalable and resilient solutions for distributed energy storage deployment.
    • Uniqueness: Their research involves the development of modular battery systems, smart inverters, and microgrid controllers optimized for decentralized energy storage applications. They also explore innovative financing models, regulatory frameworks, and business models to incentivize investment in decentralized battery storage and facilitate market adoption.
    • End-use Applications: The outcomes of their work have applications in campus microgrids, community resilience projects, and energy access initiatives. By pioneering decentralized battery storage solutions, UCSD’s research contributes to enhancing grid reliability, reducing electricity costs, and promoting energy equity and environmental sustainability in diverse socio-economic contexts.

commercial_img Commercial Implementation

Decentralized battery storage systems are being implemented in various residential, commercial, and industrial settings around the world. For example, sonnen has deployed thousands of residential battery storage systems in Germany and other European countries, while Tesla’s Powerwall is a popular residential battery storage solution in the United States.