The global commercial and industrial (C&I) battery energy storage system (BESS) market is forecast to reach US$21 billion by 2036, driven by increasing renewable energy penetration, rising electricity demand, and the expansion of energy-intensive infrastructure, according to a new report from IDTechEx.
While lithium-ion (Li-ion) technologies continue to dominate grid-scale energy storage deployments, IDTechEx notes that this has created opportunities for growth in the C&I segment, where application requirements differ significantly from utility-scale projects. These differences include shorter deployment timelines, varied cycling profiles, and greater emphasis on safety, degradation, and total cost of ownership (IDTechEx, 2026).
Demand for C&I BESS is expected to increase across several key applications, including data centers, 5G and future 6G telecommunications base stations, EV charging infrastructure, and electrified equipment used in construction, agriculture, and mining. According to IDTechEx’s report, Battery Storage for Data Centers, Commercial & Industrial Applications 2026–2036, the market’s evolution will be shaped by how storage technologies adapt to these diverse operational and performance requirements (IDTechEx, 2026).
Data centers are identified as a major near-term growth driver, particularly in the US. IDTechEx highlights that hyperscale data centers operating at gigawatt scale are placing increasing strain on electricity grids, leading to demand for higher-capacity and longer-duration storage solutions to provide grid flexibility and maintain power reliability during periods of supply constraint (IDTechEx, 2026).
Beyond the US, IDTechEx expects demand growth in China, supported by ongoing 5G deployment and future 6G rollout, as well as continued data center expansion. In Europe, increased adoption of on-site energy storage at industrial facilities is expected to support market growth. By the mid-2030s, demand is also forecast to expand in other regions as C&I BESS supports charging of electrified machinery at construction and agricultural sites (IDTechEx, 2026).
Although Li-ion BESS remains the dominant technology, the report highlights challenges related to thermal risk and accelerated degradation, particularly in applications such as data centers with frequent cycling and variable AI-driven loads. As a result, alternative technologies including redox flow batteries, sodium-ion batteries, second-life EV batteries, and valve-regulated lead-acid (VRLA) systems are expected to play an increasing role in specific C&I applications, with IDTechEx providing detailed cost and performance benchmarking across these technologies.
