The global energy-storage market will surge to a cumulative 942 gigawatts by 2040, according to a new forecast from Bloomberg NEF published Tuesday, and that growth will necessitate $1.2tr in investment. Sharply falling battery costs is a key driver of the boom. BNEF sees the capital cost of a utility-scale lithium-ion storage system falling 52 percent by 2030.

But cost isn’t the only factor. Governments from China to California are spurring demand, as is the rise of electric vehicles and solar power. There’s also been a greater focus on storage for electric-vehicle charging as well as energy access in remote areas.

“Costs have come down faster than we expected,” said Yayoi Sekine, a New York-based analyst at BNEF. “Batteries are going to permeate our lives.”

The implications of cheaper batteries are far-reaching, upending multiple industries and helping spur technologies necessary to help fight climate change. Batteries power electric vehicles and enable machines to tap solar power.

Two important markets come into particular focus. China, which is building up its battery-manufacturing capacity, will be a central player in the boom. California, meanwhile, has pushed through a series of measures in recent years that will directly or indirectly spur more batteries, including legislation that would require all of the state’s electricity to come from carbon-free sources by 2045.

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