From a technology perspective, the main battery metrics that customers care about are cycle life and affordability.
— Build resilience in supply chains. Many critical BESS components (ranging from battery cells to semiconductors in inverters and control systems) rely on complex supply chains, which are susceptible to supply shocks from a multitude of sources, including raw material shortages and regulation changes. Strategic partnerships, multi-sourcing, and local sourcing are all levers to consider when defining a supply chain strategy, while not forgetting to plan for potential technology shifts. In addition to BESS components, another bottleneck for those in the market is engineering, procurement, and construction (EPC) capability and capacity, particularly for front-of-the-meter applications. Strategic partnerships with large EPC players ready for large-scale BESS installations are crucial to ensure successful execution of BESS projects. — Focus on the product features that matter most. Product specifications should reflect what customers care about. Having a customer segment strategy that informs the road map will increase the odds that every feature matters to customers. Such an approach is especially important given that price competition is likely to remain a permanent reality in the BESS market. The right product road map will also increase the odds of having a unique selling proposition in any segment a company happens to be in. For example, making the right decision on system architecture and integrating with existing customer infrastructure (say, by coupling direct current with photovoltaic
that their transition to sodium-ion batteries is straightforward as the batteries become widely available.
Is there a recipe for success in the BESS market? If so, what is it? This is a critical question given the many customer segments that are available, the different business models that exist, and the impending technology shifts. Here are four actions that may contribute to success in the market: — Identify an underserved need in the value chain. In a nascent industry such as this, it pays for companies to think about other products and services that they could get into, whether through organic moves or inorganic ones. For instance, is there anything to stop a system integrator from doing battery packaging in-house? Or from codeveloping a new cell chemistry with a battery manufacturer? For that matter, is there anything to keep a battery manufacturer from adding system-integration or service capabilities to appeal to a specific BESS segment, such as utilities? Software is a particularly critical area to explore. The value of storage systems will likely evolve from just hardware into the software that controls and enhances the system, unlocking the opportunity to capture larger customer segments and higher margins. BESS players need to develop these capabilities early.
Accelerating the journey to net zero
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