Energy storage in 2023: Headwinds, tailwinds, and what to watch for

2022 was a striking year for the energy industry, and energy storage was no exception. Supply chain constraints caused significant headaches; lithium-ion batteries, with a manufacturing base largely in Asia, were particularly affected. The invasion of Ukraine caused shocks to the European natural gas market which in turn created significant power price spikes. In the US, the Inflation Reduction Act provided upside across the renewable energy value chain, but perhaps nowhere as significantly as energy storage, where an investment tax credit for standalone energy storage systems will be available for the first time. Looking ahead from the end of 2022, 2023 has potential to be just as dramatic for energy storage as the past year. As technology continues to develop and markets continue to grow, the next 12 months hold similar potential for significant developments as any of the next several years.