Energy storage has the potential to save £2.4 billion ($3.4 billion) a year by 2030 according to a new report from the Carbon Trust.
The report, released on Tuesday and based on analysis from the Carbon Trust and Imperial College London, finds that the United Kingdom could save billions by 2030 "if market arrangements for the electricity system allow for the use of energy storage."
If half of this saving were passed on to domestic consumers, average electricity bills could fall by around £50 a year.
There are three main types of energy storage: bulk, distributed and fast. The International Energy Agency describes energy storage as having potential in terms of helping the planet "achieving a low-carbon future."
"Energy storage has long been seen as a panacea for a low carbon energy sector in the U.K., offering a suite of services to balance the system, make electricity networks more efficient and help the U.K. to meet its carbon targets at the lowest cost," Andrew Lever, director of innovation at the Carbon Trust, said in a statement.
Storage is seen as crucial in transitioning to a low carbon, renewable future, because sources such as the sun and wind do not promise a constant stream of power.
"But storage turns conventional knowledge on its head as it doesn't fit neatly into existing regulatory frameworks, which have been designed around an energy system where power is supplied to consumers from large centralized power stations," Lever added.
A stage had been reached where technology was promising, but challenges remained relating to deployment as the result of an "outdated market framework" Lever went on to explain.
"An urgent rethink is needed so we can address and overcome the broken value chain of energy storage, which is essential if Britain is to provide low carbon energy at the lowest cost to the consumer," he said.
The report was funded by major utilities E.ON, SSE and Scottish Power, along with the Department of Energy and Climate Change, and the Scottish Government.
Fergus Ewing, the Scottish Energy Minister, praised the report's findings.
"If Scotland and the U.K. are to meet our shared ambitions to decarbonize energy and tackle climate change, we must have energy storage," he said.
"This welcome report demonstrates that investing in storage now will reduce the cost of a future U.K. electricity system, cutting bills for consumers," he added.
Ewing added that regulatory arrangements needed to change so that both the economic and energy security benefits of storage were recognized.