5 Energy Storage Stocks To Buy in 2022

Renewables are intermittent, and we need ways to store energy when the wind isn’t blowing and the sun isn’t shining. Reliable storage of clean power is more important than ever. Here is a list of five pure-play energy storage companies for you to consider.

SustainFi   Updated February 11th, 2022

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Why invest in energy storage?

As the world transitions to intermittent renewables like wind and solar, we will need more energy storage. After all, the wind doesn’t always blow and the sun doesn’t always shine. Energy storage is therefore critical for the clean energy transition. Giant batteries can charge when the sun is shining, then release power back into the grid later. California and New York are asking state utilities to install more batteries, and an enormous battery is under construction in Florida.

Battery storage is the most talked-about solution, though there are alternatives like pumped hydro and hydrogen storage. Pumped hydro involves pumping water uphill into a reservoir when power is plentiful, then releasing it on demand. It is actually the most widely deployed solution, but it’s hard to find new locations. Green hydrogen can be used to store energy too, but it remains expensive.

Lithium-ion storage continues to be the most popular type of battery storage, making up over 90% of new capacity installations. Although battery costs are rising again spurred by green metal prices, lithium-ion batteries are 90% cheaper than a decade ago, according to BloombergNEF.

Lithium-ion batteries benefit from all the research and development dollars going into lithium-ion batteries for electric cars, a larger market. But, spurred by soaring lithium prices, alternatives like zinc-based storage are also being developed.

Energy storage is growing rapidly

According to the International Energy Agency (IEA), battery storage capacity additions in 2020 increased 50% year-on-year to a record high of 5 GW. The overall investment in battery storage increased by nearly 40% in 2020 to $5.5 billion. Investment in utility-scale battery storage was particularly robust, up 60% year-on-year.

Energy storage could become a big market

The IEA believes that to get to net-zero carbon emissions by 2050, the world needs 585 GW of battery storage capacity by 2030, compared to the existing capacity of about 17 GW in 2020. And BloombergNEF estimates that global annual energy storage capacity installations will grow to about 34 GW a year by 2030, up from about 4 GW a year in 2020. Unsurprisingly, Elon Musk thinks that Tesla Energy can be the same size as Tesla Automotive.

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How to invest in energy storage

Several battery storage companies recently went public via SPAC mergers. Although the market has not been kind to SPACs lately, there aren’t many other ways of investing in pure-play energy storage. If you are an accredited investor, you can also invest in private storage companies like Form Energy in the secondary market.

Energy storage stock list

  • Fluence Energy (FLNC)
  • Stem Inc (STEM)
  • FREYR Battery (FREY)
  • ESS Tech (GWH)
  • EOS Energy Enterprises (EOSE)

Read more about each company:

1. Fluence Energy (FLNC)

  • Market capitalization: $2.9 billion

Fluence, a joint venture between Siemens and AES, makes lithium-based energy storage, including hardware and software. They also have a digital platform, Fluence IQ, which delivers bidding optimization for solar, wind, and energy storage assets. The company has installed over 3 GW of energy storage in 30 markets. Fluence also has a deal with QuantumScape, a developer of solid-state batteries, to include QuantumScape batteries into Fluence energy storage.

The stock had a rough start since it went public via a SPAC merger in October 2021. However, despite challenges like shipping delays and customer project delays, the company reported $175m in revenue in the December 2021 quarter, a 50% year-over-year increase. They’ve reaffirmed 2022 sales guidance of $1.1-$1.3 billion.

2. Stem Inc (STEM)

  • Market capitalization: $1.8 billion

San Francisco, California-based STEM makes smart battery storage software and installs large batteries for customers like utilities. The company highlights that its Athena software uses artificial intelligence and machine learning to switch between batteries, onsite power generation, and the grid. The goal is to lower energy costs and solve renewable intermittency issues.

Founded in 2009, Stem sells its software and services to utilities, power producers, and Fortune 500 companies. It’s installed about 1.4 GW of capacity to date. STEM doesn’t make its own batteries, relying on companies like CATL.

STEM has $1.8 billion in market cap and guides to about $147 million of sales for 2021. It is not yet profitable.

3. FREYR Battery (FREY)

  • Market capitalization: $1.1 billion

Norway’s FREYR is developing low-carbon lithium-ion battery storage for stationary energy storage, electric mobility, marine, and aviation industries. The startup is building two gigafactories in Northern Norway, hoping to have 43 GW in production capacity by 2025 and over 100 GW by 2030. FREYR recently won over customers like Honeywell and signed raw material agreements with green metal suppliers like Glencore. But, while the factories are being built, NYSE-listed FREYR doesn’t generate any revenue.

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4. ESS Tech (GWH)

  • Market capitalization: $778 million

ESS Tech makes iron flow batteries for energy storage. These low-cost batteries deliver 4-12 hours of storage, have a 25-year operating life, and are safe and fully recyclable. They don’t rely on hard-to-source metals like lithium, using abundant iron, salt, and water instead.

The company, which recently went public, is backed by prominent investors like Bill Gates and Softbank. Note that ESS Tech is a pre-revenue company, and the market has not been kind to pre-revenue stocks lately. 

5. EOS Energy Enterprises (EOSE)

  • Market capitalization: $182 million

Founded in 2008 and based in Edison, New Jersey, EOS develops battery-based energy storage. The company went public via a SPAC merger in 2020. The CEO, Joe Mastrangelo, was previously the CEO of Gas Power Systems for GE Power.

Unlike Tesla’s lithium-ion battery storage, EOS batteries use zinc-based batteries. Zinc is cheaper than lithium, whose prices skyrocketed in 2021. It also has good power discharge and thermal properties, which make zinc batteries less likely to catch fire. Although zinc-based batteries are not powerful enough for EVs, EOS argues that they are good enough for storage.

EOSE is a speculative, early-stage company with little revenue and no profits. The company slashed 2021 guidance blaming macro headwinds related to labor and cost inflation and global supply chain constraints, leading to energy storage project delays. And, like many other SPACs, the stock got crushed over the past year.

🔔 Interested in other energy storage solutions? Learn how to invest in hydrogen stocks.

How to invest in energy storage stocks

We recommend Public, a social investing app that lets you invest in stocks with any amount of money and see what others invest in.

NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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