The global energy storage market is expected to double as homes and businesses adopt battery energy storage to supplement rooftop solar and other renewable energy systems, according to a new report by IHS.

According to IHS, over the next decade, lithium-ion (Li-ion) batteries will become the mainstream energy-storage technology, with more than 80% of global energy storage installations including it by 2025.

This year alone, the global energy storage market is expected to double, from 1.4 gigawatt hours (GWh or billion watt hours) added in 2015 to 2.9GWh.

IHS

Global grid-connected energy storage capacity will surge to 21GWh by 2025, according IHS Technologies' Grid-Connected Energy Storage Market Tracker.

Half of all energy storage installations will occur behind the meter, meaning in homes and businesses, driven by self-consumption and back-up needs.

"Energy storage is set to grow as fast as solar photovoltaic energy has in recent years, sparking strong interest from a wide range of players and underscored by recent mergers and acquisitions among car manufacturers, major oil and gas companies, and conventional power suppliers," Marianne Boust, an IHS principal analyst, said in a statement.

Japan and the United States will be the largest energy storage markets, generating a third of market revenues (totaling $50 billion) over the next decade, IHS said. In Australia and Japan, energy storage penetration is expected to exceed 5% of installed power capacity in 2025, underscoring the growing role that storage will play in grid stability, renewable integration and energy management.

"The United States and Japan are leading the way, but we're also seeing activity in South Africa, Kenya, the Phillippines and other countries, as the cost of batteries continues to decline," Boust added.

Sunrun A Tesla Powerwall battery system as installed by Sunrun. The batteries can be installed inside or outside of a home.

Companies such as Tesla are betting heavily on Li-ion batteries, both for all-electric vehicles and behind-the-meter energy storage systems.

This week, Tesla announced it had officially opened its $5 billion Gigafactory outside Reno, Nevada, though it was only 14% completed.

By 2018, the factory will produce enough battery packs to allow Tesla to build around 500,000 electric cars. The electric carmaker plans to release its least expensive mass-consumer vehicle, the Model 3 around that same time.

Imergy In the foreground are solar panels producing electricity to be stored in a vanadium redox flow battery in the background from Imergy Power Systems. Flow batteries are a type of rechargeable battery that employ vanadium ions in different oxidation states to store chemical potential energy.

By 2020, Tesla CEO Elon Musk believes the factory will produce 35 gigawatts (a gigawatt is one billion watts) of battery capacity, with the objective of driving down the per kilowatt hour (kWh) cost of battery packs by more than 30% through economies of scale.

Tesla is offering residential and commercial Li-ion battery systems.

This week, Tesla released the second part of its "master plan," the first phase of which includes integrating rooftop solar panels "seamlessly" with battery storage.

In fact, without Li-ion battery storage systems, the U.S. power grid could fail, according to a study by Navigant Research last year.

GTM Research

As the number of solar panels on business and home rooftops multiply, America's power grid is bearing an electrical load that it was never designed to handle: bidirectional power transfer.

With bidirectional power transfer, the utility still sends power to the customer, but with solar panels, the customer can then send excess power back to the utility.

"There's no grid system in the world designed for that," said Anise Dehamna, principal research analyst at Navigant Research. "Every grid has been designed for unidirectional flow of energy -- from transmission to distribution to the end user."