Guidehouse Research Estimates Prices for 4-hour Li-ion Systems to Decline at a CAGR of -6.7% Over the Next Decade

Key drivers include technological advances, increased competition, and declining lithium prices

BOULDER, Colo., Sept. 3, 2025 /PRNewswire/ -- A new report from Guidehouse Research explores global energy storage pricing trends and market forces, focusing on lithium-ion battery production and market challenges.

To remain competitive in power markets, developers have focused on minimizing installation costs. Standalone systems are increasingly favored by grid operators for their ability to store energy independently, including excess generated capacity, and sell stored energy to the grid through buyback programs, while residential users benefit from similar capabilities at smaller scales. According to a new report from Guidehouse Research, utility-scale battery energy storage systems (BESS) prices for 4-hour (Li-ion) systems are expected to decline at a compound annual growth rate (CAGR) of -6.7% over the next decade.

"Demand for battery energy storage systems has surged over the past decade, driven by the growth of EVs and the need for grid stability," said Maya Smith, research analyst with Guidehouse Research. "The widespread adoption of EVs has also accelerated the development of safer, more advanced, and cost-effective batteries, contributing to declining BESS costs."

While demand has risen and prices have dropped, driven by technological innovation, increased competition, and falling lithium prices, several headwinds remain. In the U.S., regulatory uncertainty and tariffs are slowing further price declines. Meanwhile, global battery oversupply is pushing prices down in the short term but may lead to stagnation as the market adjusts. These dynamics affect every stakeholder in the energy storage value chain, according to the report.

The report, Global Energy Storage Pricing Trends, explores how market trends may influence Li-ion battery prices over the next 10 years in the U.S. and globally. It provides pricing analyses for Li-ion battery systems across residential, commercial and industrial, and utility segments, with three utility-scale durations (one hour, two hours, and four hours). Costs are broken down by component, including battery packs, overhead, and development costs, and presented under base-case, low-case, and high-case scenarios to illustrate potential pricing ranges. An executive summary of the report is available for free download on the Guidehouse Research website.

About Guidehouse Research

Guidehouse Research, the dedicated market intelligence arm of Guidehouse, provides research, data, and benchmarking services for today's rapidly changing and highly regulated industries. Our insights are built on in-depth analysis of global clean technology markets. The team's research methodology combines supply-side industry analysis, end-user primary research, and demand assessment, paired with a deep examination of technology trends, to provide a comprehensive view of emerging resilient infrastructure systems. Additional information about Guidehouse Research can be found at guidehouseresearch.com.

About Guidehouse

Guidehouse is a global AI-led professional services firm delivering advisory, technology, and managed services to the commercial and government sectors. With an integrated business technology approach, Guidehouse drives efficiency and resilience in the healthcare, financial services, energy, infrastructure, and national security markets. Built to help clients across industries outwit complexity, the firm brings together approximately 18,000 professionals to achieve lasting impact and shape a meaningful future. guidehouse.com

* The information contained in this press release concerning the report, Global Energy Storage Pricing Trends, is a summary and reflects the current expectations of Guidehouse Research based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report's conclusions and the methodologies used to create the report. Neither Guidehouse Research nor Guidehouse undertakes any obligation to update any of the information contained in this press release or the report.

For more information, contact:

Cecile Fradkin for Guidehouse Research
+1.646.941.9139
[email protected] 

SOURCE Guidehouse Research