Powering the future: Unlocking energy storage market performance through business model innovation in smart grids

The shift toward smart grids encourages businesses to adapt their operations to ensure long-term sustainability by integrating energy storage systems (ESS). Innovation is crucial for entering new markets and providing a competitive advantage. Therefore, this research focuses on variables impacting business model innovation in the grid to improve the performance of the energy storage market (ESM). The study employs a quantitative survey-based approach to examine key determinants of ESM performance, using data collected from 184 energy-sector stakeholders to capture critical constructs identified in the literature. Structural Equation Modeling (SEM) and Confirmatory Factor Analysis (CFA) were used to validate the measurement model and analyze the interrelationships among latent variables. The results highlight that profitability (β = 0.289, p < 0.05) has the strongest influence on ESM performance, subsequently competitiveness (β = 0.205), technological development (β = 0.201), organization learning (β = 0.183), customer satisfaction (β = 0.166), environmental (β = 0.148), and social performance (β = 0.146). These findings reveal that electricity service providers can enhance ESM performance by innovating business models that integrate organizational learning, technology adoption, customer satisfaction, social and environmental outcomes. This research provides a framework for decision-makers to foster innovation in smart grid systems, enabling smarter and more strategic choices leading to improved operational efficiency and performance in ESM. It proposes a model-based framework for analyzing ESM performance in emerging economies context.