Commercial energy storage systems – exploring the components, types, and applications


Getting effective and reliable energy storage options is crucial in the current dynamic energy environment. Commercial energy storage systems offer a crucial means of storing energy generated during low-demand periods and releasing it when demand is high. It is essential to delve into their components to understand these systems better.

In this post, we will explore each component of commercial energy storage systems in detail while highlighting their functions and importance within the overall system architecture. We will also delve into different types of commercial energy storage technologies available today, along with their respective advantages and limitations.

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    What is commercial battery storage systems?

    Commercial battery storage systems are one type of energy storage, like big power banks (a container with battery packs) that have the ability and capacity to store and then release electricity from various sources. Commercial battery storage systems come in different sizes and shapes, depending on the application and customer needs.

    These systems’ modular structure and storage capabilities range from 50 kWh to 1 MWh. They are, therefore, an excellent option for small- and medium-sized organizations looking for an energy storage system. Many business facilities, including schools, hospitals, petrol stations, shops, industries, and more, rely on them to aid their energy requirements.

    Commercial energy storage systems support the grid by employing batteries to balance demand fluctuations, offer backup power during blackouts, and aid renewable energy sources like wind and solar. Adopting this system can help you save money by reducing electricity bills and creating new revenue opportunities.

    What components makeup commercial energy storage systems?

    ● Battery system: The battery, consisting of separate cells that transform chemical energy into electrical energy, is undoubtedly the heart of commercial energy storage systems. The cells are arranged in modules, racks, and strings, as well as connected in series or parallel to an amount that matches the desired voltage and capacity. Lithium-ion has proven to be the best battery chemistry for commercial energy storage systems.

    ● Battery management system (BMS): The BMS is the main control point that ensures system safety by monitoring the battery system’s longevity, security, and efficiency. This makes the battery runs at its best regarding voltage, temperature, current, state of charge, and health. Also, it controls the cooling system and maintains the equilibrium of the cells.

    ● Inverter or power conversion system (PCS): This component is usually referred to as the “muscle” of the commercial energy storage system. This is because a battery supplies direct current (DC), but the grid or the load needs alternating current (AC) to function, so the Inverter helps with this transformation. Furthermore, it controls the output’s voltage, frequency, and power quality. How the energy storage system configures determines whether it uses an AC-coupled or DC-coupled inverter.

    ● Energy management system (EMS): The EMS is in charge of keeping track of and regulating the energy flow inside the energy storage system according to the user’s needs and preferences. It communicates with the grid, the load, and other power sources like solar and wind. It completes additional tasks like peak shaving, load shifting, frequency control, backup power, and energy arbitrage.What components make up a commercial energy storage systems

    ● Bidirectional inverter: Grid-connected commercial energy storage systems must have a bidirectional inverter as a crucial component. It enables the energy storage system to draw power from the grid or send it back to it when necessary. Additionally, it synchronizes with the voltage and frequency of the grid.

    ● Transformer: This is a vital component of any grid-connected commercial energy storage system that helps step up or down the voltage level to match that of the grid.

    ● Protection device: This component is essential for shielding the grid and the energy storage system from faults, surges, short circuits, overloads, and other abnormal circumstances.

    ● Cooling systems: These components keep the battery and other parts within the ideal temperature range to guarantee efficiency and safety.

    ● High-level control system: This element works along with other control systems, such as EMS and BMS, to improve the performance and dependability of any grid-connected commercial energy storage system.

    What are the most common types of commercial energy storage systems?

    Commercial energy storage systems come in different types but can generally be divided into five main groups. Mechanical, electromagnetic, thermal, chemical, and electrochemical are the five categories, and each has unique properties, benefits, and disadvantages.


    These systems use mechanical forces or movements to store and release energy. Pumped-Storage Hydroelectricity (PSH) system is an example that pumps water uphill when there is an excess of electricity and releases it downstream when there is energy demand.

    Another example is compressed air energy storage (CAES), which compresses air into underground caverns or tanks and expands it to power a turbine. Lastly, there is the flywheel energy storage (FES), which creates power by rapidly spinning a rotor.


    Devices such as capacitors, supercapacitors, and superconducting magnetic energy storage (SMES) use electric or magnetic fields to store and release energy. Capacitors store electric charge on two plates separated by an insulator. Still, supercapacitors have higher capacitance and can store more charge. However, SMES uses a superconducting coil to create a magnetic field capable of energy conservation with minimal losses.


    Examples of thermal storage systems that use heat or cold to store and release energy include molten salt, liquid air, cryogenic energy storage (CES), and ice/water. For example, molten salt can store heat from concentrated solar power plants and release it to generate steam for turbines.

    Likewise, Liquid air can be liquefied when excess electricity is vaporized to drive a turbine when needed. CES uses liquid nitrogen or other cryogenic fluids to store cold energy. Ice/water can store cold energy by freezing water at night and melting it during the day for cooling purposes.


    The most type of commercial energy storage systems are batteries, which store and release energy through electrochemical processes. These batteries have two electrodes (anode and cathode) and an electrolyte that allows ions to flow, creating a charge and discharge concept. The lithium-ion is often ideal for any establishment looking to use a commercial storage system due to its advantages.

    What are the applications of commercial energy storage systems?

    Peak Shaving

    In order to minimize the peak load and cut demand costs, this application idea includes draining commercial energy storage devices during times of high power demand. Customers with high peak-to-average ratios or those who are subject to high demand rates may benefit significantly from this.

    Load Shifting

    Commercial energy storage systems are used to combat the price difference in this situation. It is charged during times of low electricity prices and discharged during times of high power prices. Customers who are subject to time-of-use charges or real-time prices may benefit from this by saving money.Applications of commercial energy storage systems

    Using a 500 kW/3 MWh lithium-ion battery system, for example, a hotel in Hawaii was able to shift its load from daytime to nighttime and save $275,000 annually.

    Renewable Integration: In this use, commercial energy storage systems are combined with renewable energy sources like solar or wind to boost their efficiency and effectiveness.

    Backup Power

    In this application, backup power is provided by commercial energy storage systems in the event of grid failures or other crises. Benefits from this may include improving resilience, guaranteeing company continuity, or offering vital services.


    In this application, commercial energy storage systems will be used as a microgrid component that may run separately from the main grid or be linked to it. Benefits like increased dependability, lower emissions, or community empowerment may arise from this.

    What is the capacity of commercial energy storage?

    As previously said, small and medium-sized businesses frequently employ “commercial energy storage systems,” which typically have a storage capacity of 50 kWh to 1 MWh and are used for commercial and municipal purposes. In reality, the capacity ranges between the said value, but your ideal capacity choice of selection depends on the kind of program you’re using it for and the task you’re trying to do.

    What are the advantages of commercial energy storage systems?

    ● Resiliency: Business operations can continue smoothly and securely with the help of commercial energy storage systems, which can offer backup power in the event of grid failures or other calamities. This is highly crucial to vital facilities like hospitals, data centers, or industries that cannot afford to lose electricity.

    ● Cost Savings: By changing their use from peak to off-peak hours, when power is less expensive, commercial energy storage systems can assist businesses in reducing their electricity costs. As a result, demand charges, which are payments based on the largest amount of electricity used during a billing period, might be reduced. Commercial energy storage systems can also assist companies in generating additional revenue by taking part in demand response programs, which reward consumers for lowering their electricity use during peak demand periods.

    ● Renewable Integration: Commercial energy storage systems enable enterprises to improve their utilization of renewable energy sources like solar and wind. In order to do this, it stores excess power during times of high generation and releases it during times of low generation.

    This can lessen the reliance on fossil fuels while reducing greenhouse gas emissions. Commercial energy storage systems can also assist in grid stabilization by balancing power supply and demand and offering ancillary services such as frequency control or voltage support.

    ● Additional Grid Benefits: Commercial energy storage systems provide additional benefits for the grid and society, such as increasing security and resilience against cyberattacks or natural disasters, enhancing economic value and competitiveness by creating new jobs and markets, and decreasing environmental impact by reducing air pollution and water consumption.

    How long do commercial energy storage systems last?

    The lifespan of industrial energy storage systems is a common query people have. You want to be sure you get the most out of large-scale battery or other storage device investment since these energy storage projects have upfront costs.

    The answer is not straightforward because different energy storage systems have different lifespans, depending on their technology, design, usage, and environment. However, here are some general ranges of useful life for some common commercial energy storage technologies:

    • Lithium-ion batteries: 8 to 15 years of service life up to 8000 charge cycles for one daily cycle charge.
    • Redox flow batteries: 5 to 15 years
    • Hydrogen: 8 to 15 years

    Regardless of the lifespan indicated above, commercial energy storage systems must be monitored and diagnosed on a regular basis. These periods are simply estimations, and monitoring the system might make it last as long to your satisfaction.

    How to design commercial energy storage system according to application demands

    There’s no particular solution that works for all commercial energy storage system designs. In terms of power and energy capacity, reaction time, cycle life, cost, safety, and environmental effect, various applications may have distinct needs and limitations. Consequently, it’s crucial to take the following actions into account while developing a commercial energy storage system according to application requirements:

    Identify the applications

    What primary services or functions will the energy storage system offer? For example, frequency control, integration of renewable energy, backup power, and peak shaving. Specific applications could need multiple or hybrid energy storage solutions to achieve various goals.

    Define the performance metrics: What critical factors will determine the energy storage system’s success? As an illustration, consider the following: power rating, energy rating, round-trip efficiency, ramp rate, discharge length, cycle life, etc. The application(s) and grid circumstances will affect these metrics.

    Technology selection

    Which energy storage innovations are most suitable for achieving the performance metrics? Lithium-ion batteries, lead-acid batteries, hydropower stored in pumped storage, compressed air energy storage, redox flow batteries, hydrogen, etc., are a few examples. Each technology has pros and cons regarding cost, performance, longevity, safety, and environmental effect.How to design commercial energy storage system according to application demands

    Design the system

    How will the energy storage system be configured and integrated with other components? For example, how many modules or units will be needed? How will they be linked together and managed? What will be their relationship to the grid and other power sources? How will they be supervised and protected?

    Evaluate the system

    How will the energy storage system be tested and validated? For example, how will the performance metrics be measured and verified? How will the reliability and durability be assessed? How will the economic and environmental benefits be quantified?

    How to calculate the cost and benefit of the commercial energy storage system?

    Determining the cost and utility of commercial energy storage devices is not simple. Many factors and variables affect the economics of energy storage, such as the capital cost, the operation and maintenance cost, the degradation and replacement cost, the revenue streams, the incentives and policies, and the market conditions.

    As a result, it’s critical to assess many possibilities and situations using a systematic and transparent approach.

    The levelized cost of storage (LCOS) is a typical statistic used to assess the cost and value of commercial energy storage systems. The LCOS is the average cost per unit of energy produced by the storage system that would have to be sold to cover all project expenditures throughout the project. You can determine the lifetime cost of the storage system by dividing the system’s total lifetime energy production.

    The storage system’s total lifespan cost includes the original capital cost, the operating and maintenance expenses, the deterioration and replacement costs, and any additional costs related to finance, taxes, or decommissioning.

    The system’s performance and efficiency, as well as the consumption and application, determine the system’s overall lifespan energy production. An instance is that the energy output from a storage system used for peak shaving will differ from one utilized for frequency control.

    The LCOS can be compared with the revenue streams or avoided costs the storage system can generate or enable.

    For example, a storage system can earn revenue by providing grid services like frequency regulation or capacity market participation. Increasing self-consumption of renewable energy, decreasing demand charges, or postponing transmission or distribution improvements are additional ways a storage system might cut costs.

    You can determine a storage project’s profitability by comparing the LCOS to the income or saved costs. However, the market circumstances and rules may cause this differential to change over time and across different locales.

    Therefore, while estimating the cost and value of a commercial energy storage system, it is crucial to consider the uncertainty and sensitivity of these parameters.

    Factors to consider when choosing commercial energy storage systems manufacturers

    The energy storage project’s performance, dependability, and profitability can all be impacted by the manufacturer you choose for commercial energy storage systems. There are many factors to consider when selecting a manufacturer, such as:

    ● Technology: One thing to always consider first is the type of energy storage technology the manufacturer you want to buy offers. Many of them can use lithium-ion batteries, lead-acid batteries, pumped-storage hydropower, compressed-air energy storage, redox flow batteries, hydrogen, etc. All these technologies are superb in their way and have their flaws as well, so choose the one that matches your application requirements and performance metrics.

    ● Quality: The standard of the manufacturer’s products and services should also be considered constantly. Consider how effectively they adhere to industry’s rules and regulations and how they ensure that their products are reliable and safe. Ensure they have a reputable path for product testing and validation before being delivered while managing after-sales support and the warranty. You must pick a supplier with a solid reputation for reliability and client delight.Choosing a commercial energy storage system manufacturers

    ● Experience: Your chosen manufacturer should have knowledge and experience in the energy storage sector. You can get a view of their skill from how long they have been in industry and how many successful projects they have accomplished. By finding that out, you can determine how diversified their markets and clients are as well as how cutting-edge their offerings are. You should choose a manufacturer with a solid reputation and a strong portfolio of energy storage projects.

    ● Cost: Since each manufacturer sets their prices differently, you should determine the cost of their product. This might help you understand how affordable the pricing is compared to other companies.

    Through their price transparency, you can choose wisely by checking through different pricing models and frameworks. Additionally, several manufacturers provide financing alternatives and flexible payment periods, which make adhering to a payment plan simple. You ought to pick a producer that is affordable and provides worth.

    ● Support: It is also essential if your chosen manufacturer offers good customer service and support. You can find out how responsive they are to your inquiries and requests. This shows how well they will communicate and collaborate with you throughout the project lifecycle.

    Can commercial battery storage systems be connected with photovoltaics?

    Establishing a solar-plus-storage system by connecting commercial battery storage systems and photovoltaics (PV) is possible. This system can store extra solar energy during the day and use it at night or during grid outages. In fact, it lowers demand costs and grid fees while increasing the self-consumption and dependability of solar electricity.

    In addition to participating in energy markets like demand response or energy arbitrage, a solar-plus-storage system may offer grid services like frequency management or voltage support. A solar-plus-storage system may be a financially successful and environmentally responsible choice for businesses.

    Where can I buy commercial energy storage systems?

    You can buy commercial energy storage systems from manufacturers, integrators, or distributors. You can also contact an energy-service company to help design and install a customized system for your needs.

    Grevault is a professional company in the industrial and commercial energy storage industry, with several years of hands-on experience.

    The company’s extensive experience has enabled the team to accumulate a wealth of knowledge and expertise in the field.

    They possess a keen ability to propose energy solutions that are tailored to meet the specific requirements of their customers, ensuring that their clients receive the best possible service.


    Commercial energy storage systems are growing in acceptance and affordability as technology improves and regulations encourage their use. These systems can store and transmit energy for various uses, including peak shaving, frequency management, renewable energy integration, backup power, and more. Understanding the technology and system design is necessary to make the best decision.


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