For much of the last decade, perovskites have been promoted as the future of solar panels, but commercialization has been slow, and only a few manufacturers are willing to test pilot lines. In energy storage, a different technology is moving in the opposite direction: as soon as sodium-ion designs were proposed as alternatives to lithium batteries, manufacturers began setting up production and securing orders.

“It’s been fun,” said Randy Selesky, chief commercial officer at ESS Inc. “I’ve been in this market a long time, and I have not seen the market really grab on to something this fast.”

For a market once best illustrated by lead-acid batteries for off-grid living, today’s global energy storage industry is dominated by lithium, excluding pumped hydro-storage, and it is expanding quickly as utilities install batteries to shift daytime solar and wind generation into evening peak hours. Within lithium’s share, lithium-iron-phosphate (LFP) has become the most-installed chemistry in grid-scale and residential applications, accounting for 80% of new battery storage worldwide in 2023 — a chemistry first developed at the University of Texas at Austin in the 1990s before its manufacturing scaled in China. While lithium batteries have helped drive the industry’s expansion, some of their characteristics remain limiting.

Although LFP batteries are much safer and less susceptible to thermal runaway than earlier lithium chemistries, some applications still cannot tolerate their fire risk. Lithium batteries also perform best within a narrow temperature range, and the auxiliary power required to run chillers and fans can make some projects uneconomic in certain regions. In addition, China dominates the lithium supply chain, making a fully domestic energy storage supply chain difficult to establish.

Sodium-ion is not a new invention. The chemistry was explored in research labs as far back as the 1980s, before lithium-ion’s commercial success pushed it to the sidelines, and it stayed largely dormant until CATL, the world’s largest battery maker, unveiled its first-generation sodium-ion cell in 2021. Sodium-ion packs have since reached series production in small city electric cars sold in China, including models from automaker JAC.

Sodium-ion offers an alternative. Made from sodium — a nontoxic element that is among the most abundant in Earth’s crust and a core ingredient of common table salt — sodium batteries can be manufactured in a similar way to lithium batteries, using the same-sized cells, modules and final systems. They also operate across a wide temperature range, from -40°F to 140°F without output degradation, which removes the need for HVAC systems. And because they do not rely on critical minerals, sodium battery manufacturing could theoretically be located in the United States, Europe, Australia or elsewhere.

Earlier this year, Morgan Stanley Research estimated that sodium-ion batteries would hold 2% market share by deployment in 2027, then rise to 20% by 2030 and 37% by 2035. Two chemistries — sodium chromium oxide (NCO) and sodium iron-phosphate pyrophosphate (NFPP) — appear to be leading the market into the next decade. NCO offers higher energy density, while NFPP is cheaper to manufacture, but either can serve as an alternative to lithium, said Darren Tan, co-founder and CEO of sodium cell developer Unigrid. Sodium-ion cells generally store less energy by weight than lithium chemistries, a limitation that matters most in electric vehicles and least in stationary storage, where bulk and weight carry fewer penalties — one reason grid-scale systems are the technology’s first major target.

“New technologies always serve to open new markets or new applications,” Tan said. “When we encounter customers who already use LFP for their applications, we tell them that they’re doing a great job and should keep doing it, unless they have certain challenges like not getting enough power or enough safety, it’s not lasting long enough, they need to run in the cold or extreme heat. That’s when we step in to solve these problems.”

Sodium-ion market takes shape

The promise of sodium-ion technology has attracted companies across the energy storage market. Flow battery pioneer ESS has taken an interest and will release its first grid-scale sodium design next year. Selesky said the move into sodium is not a departure from long-duration flow batteries, but an addition to the company’s lithium alternatives.

“Lithium is still 95% of the market, in that two- to eight-hour range. This is the first product we’ve seen that can go head-to-head against the traditional use-cases of lithium-ion,” he said. “We saw this as an opportunity to go after 95% of the market, leveraging our 14 years’ [experience] of being able to do installation, integration, ongoing maintenance support.”

Selesky said ESS will shift its R&D toward a 16- to 48-hour discharge flow battery, because there are still many opportunities where long-duration energy storage is necessary.

“We see this as a perfect opportunity to reset iron-flow,” he said. “When you’re in long-duration, you’re creating a market and that market is still being created. [Working with sodium] gives us an opportunity to get on the flywheel and really start spinning product out.”

ESS will use NFPP cells from startup Alsym in its 1.2-MWh AC energy storage system. Alsym, a Boston-based sodium-ion cell developer, is manufacturing a small amount of product on the East Coast, and ESS will assemble the cells into the “Bridge” energy storage system at its manufacturing site in Oregon.

“[NFPP] follows the same characteristics that ESS has followed since its birth — no risk of fires and it’s safe,” Selesky said. “Our first launch is in 2027, and then we’re doing a second launch, which increases the density, in late 2028. That’s how fast this technology is moving. I can already see what’s in R&D that will come out three years from now.”

The pace of development is so fast that Peak Energy, a company formed in 2023, is already setting up multi-gigawatt-hour manufacturing. The company is on track to begin delivering its Sacramento-manufactured GS1 storage system by mid-year 2027.

Brandon Kelly, Peak Energy’s chief scientist, said the company’s rapid rise was part of the original plan.

“Peak’s approach is to get to product quickly, not develop in a lab for 10 years and then launch a product and try and find a market,” he said. “There is a strong market demand, and there’s a technology that the base chemistry enables a much better product to meet that demand — from the actual product itself, the supply chain and energy security here in the States.”

The GS1 is a 3.1-MWh NFPP system, which Kelly described as “a perfect fit for grid-scale storage.” Peak Energy’s main selling point is sodium batteries’ passive cooling, which removes chillers and fans from the design.

“[With chillers,] there are moving parts, there’s refrigerant, coolant, filters, fans, tons of noise. It’s great that we can do it, and I’m happy that it’s enabling a lot of things. But those are engineering workarounds we have to do for lithium to meet the application,” he said. “Because this version of sodium-ion is more temperature tolerant, we can just let it get hotter and we can still hit the lifetime. Even in our passive system, we’re still at 85% state of health after 20 years. Lithium-ion, even with liquid cooling, is around 65%. And with sodium, you don’t have any moving parts, the amount of maintenance goes way down. It’s beautiful simplicity, which is enabled all the way down at the chemistry level.”

Room to play in residential

While much of the energy storage market focus is on grid-scale systems, the residential market can also benefit from sodium designs.

Unigrid, a sodium-ion cell R&D company that originated at the University of California San Diego, has been developing the technology since the beginning of the decade. The company recently announced a partnership with manufacturer Syntropic Power to make NCO batteries in the United States.

“It checks all the boxes. It has a great cycle life, great safety, great power, great cost,” Tan said of the NCO chemistry. “The only downside is it’s not available in China, so you can’t just buy if off the market. We work with foundries to develop this new production process. It not being available also means that we’ll be the only one supplying it, so that’s one of our key advantages.”

Sodium-ion manufacturing is so similar to lithium battery production that many of the major lithium players — BYD, CATL and Hithium — are quickly adapting existing lithium manufacturing lines for sodium designs. But that also means they are focusing more on scaling grid-scale sodium batteries, which tend to favor NFPP chemistries. With Unigrid focused on NCO chemistry, Tan said the company is targeting the less crowded residential storage market.

“In China, there is no such thing as a residential market, so the major Chinese players don’t dominate this space. It’s also the reason why residential batteries are historically unaffordable,” he said. “You have utility-scale batteries fighting for cents on the dollar, and then you have [residential batteries] that are still $10,000 and above. We realized this is an opportunity for us to step in and change the status quo. Sodium-ion is a reset.”

Unigrid has developed a residential battery prototype, the 9.25-kWh Na+Casa, which can operate in extreme temperatures without external cooling devices and has a 10,000-plus cycle life at 100% depth of discharge. The 9.25-kWh capacity rating was determined by current fire codes from the National Fire Protection Association, which have not yet caught up with sodium-ion development. Sodium batteries are still treated as part of the “all others” category, rather than lead, lithium or flow, and are limited to 10 kWh.

The 9.25-kWh capacity of a single unit may be lower than the 15-kWh lithium models available in the residential market today, but Tan said sodium batteries have other advantages and should still be considered.

“Unlike lithium-ion, where a big chunk of your cost is lithium and its critical materials, sodium-ion is very much flipped,” Tan said. “The sodium-ion raw materials are extremely low cost, and most [of your cost] is in manufacturing. That means the potential for sodium-ion costs to come down is much greater. Today it is still higher than lithium-ion, but I expect in the next five to 10 years it will come down very sharply.”

Sodium battery companies may already be walking the walk, but soon they just might be running away with the energy storage market.