Battery energy storage systems diffusion towards the smart grids : the case of Italy and the U.S.

The concept of Diffusion of Innovations has been studied from different perspectives since 1903. Majority of studies have focused on demand-side aspects rather than supply-side diffusion of new technologies in the market. Recently, smart grids have become a topic of intensive research, development, and deployment across the world in different sectors such as residential, commercial, and industrial. Battery Energy Storage Systems (BESS), as one the enabling technologies of smart grids, can help the system for peak shaving, grid stabilizing, and frequency regulation by storing the electrical energy generated from renewable sources. Considering the critical role of renewable energies in sustainable development, the smart grids and battery energy storage systems are crucial new technologies which can bring significant positive changes to the planet. This research explores the slow pace of diffusion of Battery Energy Storage Systems in the U.S. and Italy markets based on Chakravorti’s diffusion framework which mostly looks at the supply-side perspective. In fact, the main objective of this study is to understand the reasons giving rise to the slow rate of BESS diffusion in the markets of United States and Italy. Besides, it should be discovered what external or internal factors can facilitate this process. Hence, a multiple case-studies approach has been chosen in order to analyze these two markets through three main levels which are company level, country level, and industry level. Thus, the analysis of seven case studies in the United States and six case studies in Italy indicates that regulatory issues and high cost of the system are the most critical barriers preventing the widespread diffusion of this new technology within the BESS market. Moreover, batteries technological immatureness is the second most important issue slowing down the dispersion rate. On the other hand, government’s role, as a key external factor, and consideration of other players’ desired endgame, as an internal factor, can help this industry to grow faster. Furthermore, utilization of a proper type multiplier mechanism can accelerate spreading of Battery Energy Storage Systems within the market.