Renewable energy sources, once considered the love children of tree-hugging hippies, have hit the mainstream. Solar panels dot the roofs of houses and populate previously barren fields. Wind turbines silhouette the horizon off highways and beach roads. Yet despite its pervasive presence, renewable energy will not be a front-line supplier until efficient storage is in place.

Because power from the sun and wind is intermittent, it’s not always available during periods of peak demand. Imagine your television would only operate on sunny days or your refrigerator only cool when gusty winds prevailed.

Currently, solar energy is tied into traditional power grids. When solar panels produce excess energy, that energy is sent back to the grid and redistributed to other customers. At night when your solar panels are dormant, your home pulls energy from the traditional grid. You would not be able to access reliable energy via solar without the back-up from the incumbent grid.

Technological breakthroughs and increasingly robust government regulations are quickly expanding the energy storage market. Industry source Frost & Sullivan expects the energy storage market to grow from less than half a billion dollars in 2014 to $8 billion over the next 10 years. And analysts at GTM Research predict additions to energy storage capacity will triple in 2015 after growing 40% in 2014.

Regulatory Forces Driving Change

Government regulations such as the Obama administration’s Clean Power Plan, which requires power plants to reduce carbon emissions by 32% by 2030, are helping to propel domestic growth.

States have responded to the Clean Power Plan with their own initiatives, like California’s Distributed Resource Plan (DRP), which requires integration of renewable energy sources into the existing utility grid. New York, Arizona, Texas and Hawaii all have put in place initiatives to encourage energy storage development. Just this past June, President Obama announced $4 billion in funding to finance research for clean energy technologies, with energy storage a major focus.

Worldwide proposals are fueling development as well. The Chinese government has put in place policy initiatives to boost energy storage commercialization with its National Development Energy Strategy for 2014-2020. Japan has proposed $700 million in funding for renewable energy storage in 2015.

Renewable energy sources such as the sun and wind are natural, sustainable and now more affordable due to significant cost declines over the past few years. The biggest issue with these sources is their variable production based on fluctuations in the weather. There is a mismatch between consumer demand for electricity versus this patchy production. Reliable storage solutions will help smooth these spikes.

Storage Possibilities

Fortunately, there are several different technologies in the works to house renewable energy generated now for later use.

Lithium-ion batteries are the most widely accepted technology and accounted for 70% of storage capacity in 2014. Due to their first-mover advantage, as well as the hype surrounding Tesla Motors’ (NSDQ: TSLA) Gigafactory, batteries will likely continue to be the most popular storage method.

The Tehachapi Energy Storage Project, based in a windy spot between the Mojave Desert and the San Joaquin Valley, is a good example of battery use. The project ties a prosperous wind farm to giant lithium-ion batteries, which are joined to the region’s power grid.

Meanwhile, New York State is developing it first utility-scale battery power storage system in Queens, and Hawaii is building out similar systems.

Despite this entrenched market lead, battery power does have some limitations. Batteries supply only short discharge times and have high production costs, which may limit scalability.

But there are other possible solutions, including two technologies that rely on good old-fashioned gravity to help power their storage.

Pumped hydro storage (PSH) moves water from a lower reservoir to a higher spot where it can be released when power is needed. The energy is recaptured as hydroelectric power during the release of the water. One positive aspect is the short lead time required to deliver power, but geographic limitations and high upfront costs have hampered adoption of this technique.

Another method using gravity is advanced rail energy storage (ARES). ARES is described as pumped hydro without the water. Box cars on a rail line are pushed up an incline and generate energy via their downhill momentum. While developers of the concept state that the upfront building costs will be less than those for PSH, the method is still in its early testing stages.

Compressed air energy storage (CAES) utilizes air pressure to store energy. In this method, air is compressed and stored under pressure in an underground cavern. When energy is needed, the air is heated to expand and drive a turbine.

There are already two utility-scale CAES facilities operating in the world. One started in Germany in 1978 and the second in Alabama in 1991. While this method is proven and produces long-duration energy, it is geographically quite limited.

Flywheels are another viable storage option. Though quite expensive to build, they are extremely durable with a long service life. They are wound up like a spring and release tremendous amounts of energy when unleashed. These can be used in niche situations where the customer requires a short burst of high power.

Clearly, the utility grid of the future will look nothing like what exists today. Lithium batteries and a host of other technologies will be linked with the modern grid to collect and redistribute renewable energy.

Some utilities are sitting idly by while lamenting the disruption of their century-old business model. But as regulatory momentum toward renewables accelerates, others are quickly adapting to these changes to ensure their continued dominance no matter which technology prevails.

In fact, our top pick in the Growth Portfolio is at the forefront of these changes, as are some of the other utility giants among our Core Holdings.