Behind-the-Meter Battery Storage for Commercial & Industrial Customers
Behind-the-meter battery storage for C&I customers is growing 40% annually, with IRA tax credits shortening payback periods to 3-5 years and third-party ownership models expanding access.
Behind-the-meter (BTM) battery storage for commercial and industrial customers is experiencing rapid growth as businesses seek to manage electricity costs, improve power resilience, and meet sustainability goals. The US C&I storage market exceeded 2 GW of cumulative installations in 2025, with annual deployments growing at over 40%.
The primary economic driver for BTM storage is demand charge management. Commercial electricity customers in many utility territories pay demand charges based on their peak 15-minute power draw during each billing period. These charges can represent 30-50% of total electricity costs. Battery storage systems can shave peak demand by discharging during high-draw periods, reducing demand charges by $5-$15 per kW per month.
Healthcare facilities, manufacturing plants, and data centers are among the most active adopters of BTM storage. These customers value both the cost savings and the backup power capability that batteries provide. A 1 MW/4 MWh system at a hospital, for example, can provide both daily demand charge savings and 4 hours of emergency backup power, replacing or supplementing diesel generators.
The IRA's Investment Tax Credit for standalone storage has dramatically improved BTM storage economics. The 30% ITC, combined with potential bonus credits for domestic content and energy communities, can cover nearly half of system installation costs. Payback periods for BTM storage in high-demand-charge territories have shortened from 7-10 years to 3-5 years.
Third-party ownership models have made BTM storage accessible to businesses that prefer to avoid capital expenditure. Companies like Stem, Convergent Energy, and Enchanted Rock offer storage-as-a-service models where they own and operate the battery system, sharing cost savings with the host customer under long-term contracts.