Energy storage, a key factor in the effort for a green, carbon-free transition, entails high cost as most current storage solutions depend on lithium-ion batteries, which are powerful but relatively expensive.

This high cost, as pointed out by the Financial Times’ sifted.eu, has restricted the ambitions of some companies, but others are putting energy-storage technology to good use.

For example, Polarium – a startup in Sweden’s booming battery industry – provides lithium-ion backup power to the telecom and commercial sectors. The company notes its ability to efficiently convert DC power generated by solar panels into AC power required by most devices is its unique selling point.

Dozens of companies are looking beyond lithium, according to the sifted.eu report. This trend has increased since last year’s sharp rise in raw materials for lithium.

Investment in new batteries in Europe is forecast to reach 30 billion euros by 2030 as the continent prepares for a renewable energy future.

The search for a stable, cost-effective lithium alternative is widespread. Startups including France’s Tiamat are making salt-based batteries. Sodium, next to lithium on the periodic table of the elements, is not only similar, but more abundant and cheaper.

On the other hand, the energy density of sodium is relatively low, which means that batteries using salt need to be larger and heavier than their lithium counterparts.

Europe faces tough opposition in the energy storage sector. China dominates lithium-ion production and is making efforts to dominate the sodium-ion supply chain.

US battery manufacturers, meanwhile, can receive significant tax credits – up to 30 percent of system installation costs, courtesy of the Inflation Reduction Act (IRA) supporting climate investment. Manufacturers can also benefit from a 20 percent bonus available if certain requirements are met, such as the use of household components.

Regulatory stability is critical to ensure the scaling up of capital-intensive energy storage projects. However, vague definitions of energy storage have led to some confusion about whether it is a consumer or producer of electricity. And this often leads to double taxation.

On the positive side, this sector offers tremendous potential and is attracting investors. Venture Capital funding in European energy storage is up 7 percent in 2023 compared to 2022.