One of a series of excerpts from the 2014 State of Green Business report (download here).

One of the big technology stories of 2013 had to do with batteries. Not your garden-variety AA or D type, or even the rechargeables found in phones, laptops and cordless appliances. We're talking about large-scale batteries that provide energy storage for the grid. That story will become even bigger in 2014, as technology and economic forces begin to solve one of the big hurdles to a low-carbon energy future. And it increasingly will affect how many companies and commercial and industrial building owners manage energy.

The ability to cost-effectively store energy to power buildings is nothing less than a game-changer. For starters, it enables renewable energy to more easily become cost-effective. No longer do solar- and wind-energy customers need be subject to the vagaries of the sun and wind. Energy can be produced when it's shining (or blowing) and saved for a rainy day, literally.

Battery technology is nothing new, but for years companies have been trying to create a new generation able to store megawatts of energy — enough to power homes and businesses. Doing so not only will benefit renewables, but also will make homes and businesses better able to withstand outages or disruptions. After years of hard work, the technologies finally are achieving the price and performance targets needed to make the competitive.

The growing commercial uptake is due in large part to technological advances, but also in response to Superstorm Sandy and other extreme weather events that knocked out power to large areas, and knocked some companies for million- or billion-dollar losses. Suddenly, back-up power is looking more and more like a necessity.

Fortunately, the technology is marching forward. There are now 29 energy storage technologies in use worldwide, according to Navigant Research. They range from the conventional — refrigerator-sized bundles of lithium-ion batteries (the kind used in laptops, among other places) — to, well, the less conventional, such as capacitor batteries, lithium titanate oxide, nickel-iron and solar thermal. That's a lot of technologies, and there no doubt will be a shake-out, as we've seen with solar and many other technologies.

The sheer number is a factor of the global interest in harnessing energy storage to store both renewable and nonrenewable energy, to be used at times it is needed most, whether on a daily basis or for "just in case." Asia seems to be taking the lead on energy storage, in particular China and Japan, for somewhat different reasons: China to make maximize use of renewables instead of polluting coal plants, and because its grid remains shaky and in need of reliable power; Japan in response to the Fukushima nuclear power plant disaster, which has resulted in dramatic increases in demand for renewable and backup power.

But the situation isn't that different in North America, Europe, Russia and the Middle East. As energy grids become more diversified and bigger, there are emerging opportunities for large-scale energy storage systems.

Key developments and successes

Companies are seeing opportunities, too, and many technologies are being marketed directly to commercial customers. Consider a Silicon Valley company called Stem — which makes sophisticated storage systems that bundle lithium-ion batteries with sophisticated analytics that optimize decisions about when to pull power from the grid and when to draw on the battery. Stem also took a page from the solar industry and created a no-money-down finance option to make its behind-the-meter storage solution cost effective for commercial customers. It counts among its customers InterContinental Hotels, which installed the technology at its Mark Hopkins hotel in San Francisco before installing the batteries at 16 other California hotels.

InterContinental no doubt sees the business value in energy storage. So do a growing number of other property owners. "Just like real estate values are higher for green buildings with LEED recognition, in the future, grid-hardened buildings may command premium prices because they preserve delivery of services regardless of grid status," said smart-grid analyst Christine Hertzog.

California is one hot spot for energy storage. In 2013, it passed an energy storage mandate that instructs California's investor-owned utilities to expand their electricity storage capacity and procure 1,325 MW of electricity and thermal storage by 2020. As other states follow California's lead, as they inevitably do, that further will accelerate market demand and technology innovation for energy storage.

Another recent development further promises to rev up the energy storage market. SolarCity announced a service to install lithium-ion batteries made by Tesla Motors alongside photovoltaic panels. Business customers sign a 10-year contract with monthly fees, rather than purchase the batteries and solar panels. The batteries are the same used in Telsa's electric cars, but are packaged with power electronics to store solar energy, provide power to a building and connect to the grid. The entire system is remotely monitored by SolarCity.

Impact on utilities

One big uncertainty is how all this will affect electric utilities. After all, if buildings generate their own power (via solar panels or wind turbines), and can save it for use at any time (via batteries), and can contract with companies such as SolarCity to install and manage the whole thing with no upfront investment, the role of utilities shape-shifts somewhat. That's another trend in the making.

Danny Kennedy, founder of the solar company Sungevity, has observed that the future of energy utilities might be a hybrid of eBay and UPS — that is, a company that arbitrages power generated by independent sources and delivers it in a timely fashion where and when it's needed. However fanciful the description, it may not be far from the mark.

Batteries photo by monticello via Shutterstock