Energy storage systems are currently among the most discussed and questioned topics in the energy sector. Not because they represent a completely new or unfamiliar technology, but because many practical uncertainties remain: what storage systems are actually used for, how they should be operated, and why they are needed in the first place.
Many businesses have already invested in energy storage but struggle to extract real value from it. Others are only considering such investments and are trying to understand whether a storage system will ever pay off.
So what should businesses know today about the purpose of energy storage systems, their use cases, and the key criteria that truly matter when selecting such equipment?
Value and Payback Depend on How the Storage System Is Managed
The benefits and necessity of energy storage systems can be assessed from two distinct perspectives.
The first category includes storage systems connected to the electricity grid and used to provide balancing services. Their role is straightforward. As solar and wind generation continue to grow rapidly, electricity grids face increasing instability. Storage systems help solve this challenge by absorbing excess energy and supplying power when generation is insufficient.
For businesses, such systems can function as investment assets. Once connected to the grid, they can generate revenue by providing balancing services. In this model, the storage system is handed over to a balancing service provider, which operates it to maximize returns from market tariffs related to availability, charging, and discharging.
However, it is crucial to understand that in this scenario the system works for the grid—not for the company that owns it. Operating schedules are determined by market operators, meaning the business no longer controls the system and cannot use it to meet its own energy needs.
The second category includes storage systems installed by companies or households for their own use. Here, the range of potential benefits is much broader. A storage system can reduce electricity costs by storing energy when prices are low or when it is generated by solar power plants, and then using it during peak hours when electricity is more expensive.
It can also serve as a backup power source during outages or address situations where the grid operator cannot provide sufficient capacity, even though that capacity is only needed for a few minutes per day. In such cases, storage systems help avoid costly substation upgrades or the installation of new power cables.
Still, the most important question for any business considering an energy storage system remains the same: will it pay off—and if so, when? The answer depends almost entirely on how the system is managed.
If a storage system operates according to the simplest logic commonly used in household hybrid inverters—charging when there is excess solar energy and discharging when demand increases—the payback period can be as long as 30 years. In practice, such systems often consume more electricity than they save or generate in value.
Another possible scenario is so-called battery arbitrage. In this case, the system operates based on electricity market price fluctuations, charging when electricity is cheapest and releasing stored energy for use or sale when prices rise. Even then, the payback period can still be around 20 years, meaning the system may again consume more energy than it earns.
The situation changes fundamentally only when storage is managed in a combined and intelligent way. By using specialized software—an advanced energy management system that forecasts consumption, market prices, and renewable energy generation—it becomes possible to select optimal charging and energy sales strategies.
Under these conditions, the very same storage system, installed in the same location, can deliver dramatically better results. Payback periods can fall to around five years, while returns increase severalfold.
In short, real efficiency depends on understanding which algorithms are used and how a grid-connected storage system actually operates.
From Cybersecurity to Cell Imbalance
In practice, there are many cases where a business purchases and installs a storage system that appears to function properly, only for the grid operator to refuse grid connection because one required function is missing. This often happens because some manufacturers are eager to enter the European market with equipment that does not fully comply with EU requirements for energy storage systems.
For this reason, businesses should always ask manufacturers two essential questions. First, does the system include a Modbus register list—a standard communication protocol that allows a management system to access data and control the storage unit? Without it, effective control is impossible. Second, can the manufacturer provide a completed grid operator’s compliance table describing how the system operates when connected to the grid?
It is also important to be aware that some features are sold on the market even though they do not yet function in practice. Certain solutions are marketed as “highly efficient,” only for it to emerge during implementation that neither the buyer nor the manufacturer fully understands how they should work. Before purchasing, businesses must ensure that the equipment is
genuinely suitable, that all functions operate as intended, and that the system will be approved for operation. Otherwise, they risk investing in expensive equipment that delivers no real value.
Another critical aspect of deploying energy storage systems is cybersecurity. In Lithuania this area is regulated by amendments to the Energy Law adopted last year, which require all solar and wind power plants and storage systems with capacities of 100 kW or more to meet strict security standards. These requirements apply to all new projects, while existing installations must implement security measures by May 1 next year. In Lithuania the legislation specifies several key technical requirements. Firewalls must be installed, and unsecured radio communication technologies may not be used. Firewalls must include antivirus protection and packet inspection functions (IDS/IPS). Cybersecurity audits are mandatory and must be repeated every two years—they are not a one-time exercise. In addition, monitoring systems from unfriendly countries are prohibited, meaning that monitoring platforms used by certain Chinese inverters or storage systems will be blocked.
Another issue that must be considered is cell imbalance, which develops over time as storage systems operate intensively. When this occurs, capacity readings become inaccurate—for example, the system may show 100% when charged to only 70%, or suddenly drop from 30% to zero during discharge. This indicates reduced actual capacity, malfunctioning algorithms, and lower earnings. For heavily used systems, cell balancing should therefore be performed almost monthly.
Temperature control is equally important. If storage systems are installed in unheated facilities where temperatures fall to around 10°C, lithium cells can no longer charge at normal rates, creating safety risks. Operation below freezing temperatures is not possible at all. As a result, proper preparation is essential: storage systems must be heated and consistently maintained at temperatures close to 20°C.
In conclusion, before investing in an energy storage system, businesses must understand that purchasing the equipment alone will never automatically generate value. Real benefits require compliant hardware that meets the grid operator’s and cybersecurity requirements, appropriate technical solutions, and—most importantly—professional system management. Only under these conditions can an energy storage system stabilize consumption, reduce costs, and generate real financial returns.
Dr. Šarūnas Stanaitis, the CEO of Inion Software