The Safety Revolution in Energy Storage: How UL Solutions is Shaping the Future of Battery Innovation and Investment Opportunities

The global energy transition hinges on the safe and reliable deployment of battery energy storage systems (BESS). As the world accelerates its shift to renewable energy, the demand for energy storage has surged—driven by rising energy costs, grid instability, and government incentives. But with this growth comes heightened risk: thermal runaway events in batteries can lead to catastrophic fires, as seen in high-profile incidents like the 2025 California BESS fire. Enter UL Solutions, the global safety science leader, which has launched a series of groundbreaking updates to its testing protocols to address these risks. These changes are not just technical milestones—they are critical enablers of the energy storage market’s expansion, creating significant investment opportunities in the process.

The UL 9540B Standard: A Game-Changer for Residential Safety

UL’s UL 9540B, introduced in 2024, targets the residential BESS market, which is projected to grow from $898 million in 2023 to over $2 billion by 2028. This standard uses large-scale fire tests (LSFT) to simulate real-world scenarios, such as rooftop solar pairings or garage installations. By mandating containment of thermal runaway events, UL 9540B ensures that residential systems can mitigate fire spread—a key concern for insurers and regulators.

The protocol’s success lies in its collaboration with stakeholders: fire departments, manufacturers, and code authorities. Deputy Chief Robert Marshall of the San Mateo Fire District praised the standard’s balance between safety and accessibility, a critical factor for scaling adoption. For investors, this means reduced regulatory friction and a clearer path to market for companies compliant with UL 9540B.

2025: A Year of Breakthroughs and Lessons Learned

The past year has seen UL Solutions push further into emerging technologies. In March 2025, it unveiled a safety framework for solid-state batteries, integrating AI-driven predictive analytics and advanced fire suppression systems. This aligns with a market forecast: solid-state batteries could capture 20% of the EV battery market by 2030, driven by higher energy density and reduced fire risk.

Later, following the California fire incident, UL tightened its standards for large-scale systems. The updated UL 9540A 5th Edition now requires quarterly cybersecurity audits and stricter thermal runaway containment testing. These changes reflect a growing recognition that safety must address both physical and digital vulnerabilities.

The Fifth Edition of UL 9540A: A Blueprint for the Future

The 5th edition of UL 9540A (effective January 1, .2025) introduces sweeping changes critical to investors:
- Arc fault testing and thermal stability under extreme conditions ensure reliability in harsh environments.
- AI-driven predictive analytics mandates will favor companies with strong software capabilities, like Tesla (TSLA) or Fluence.
- Sustainability criteria requiring recyclability documentation will reward firms investing in circular supply chains, such as Redwood Materials.

The inclusion of third-party certification for battery management systems (BMS) also signals a shift toward trust in standardized, auditable processes—a boon for investors seeking low-risk, high-growth opportunities.

Why This Matters for Investors

UL’s updates are not just about safety—they’re about market access. Manufacturers compliant with these standards can confidently scale production, while utilities and governments will prioritize UL-certified systems for grid projects. The Safe Energy Storage Ecosystem program, which uses blockchain for lifecycle tracking, adds a layer of transparency that reduces counterparty risk for investors.

Consider the data:
- The global energy storage market is expected to hit $163 billion by 2030, up from $50 billion in 2023.
- UL’s collaboration with the National Fire Protection Association (NFPA) ensures its standards underpin codes like NFPA 855, giving certified systems a regulatory advantage.

Conclusion: A Safer Future Means Better Returns

UL Solutions’ advancements are reshaping the energy storage landscape, turning safety from a liability into a competitive edge. Investors should prioritize companies that:
1. Adopt AI and predictive analytics (e.g., Tesla’s Powerwall, Fluence’s grid software).
2. Focus on sustainable materials and recycling (e.g., Redwood Materials, Northvolt).
3. Partner with UL-certified testing firms for compliance assurance.

The $2 billion residential BESS market and the $163 billion global storage sector are ripe for investment—but only in firms that align with UL’s rigorous standards. As Wesley Kwok of UL Solutions noted, “Safety is the foundation of innovation.” For investors, that means backing companies that build on that foundation to capture the energy transition’s next wave.

With UL leading the charge, the energy storage revolution is safer—and more investable—than ever.