Storage will be a critical component of the new grid. Each home will have the ability to store the majority of the energy that it uses. This wide distribution will narrow the insane search for dirty fuel to turn massive turbines or power dangerous nuclear plants. It will reduce the exposure to threats via natural disaster or terrorist activity. This will in turn reduce the cost of protecting the grid as it currently exists which will reduce the unseen costs of protecting our power plants and protecting the fuel production and transportation costs. I have not factored these costs into the formulas, however they are enormous. Part of the reason many governments are creating subsidy to incent purchasing these types of products is because they too understand the underlying capitol and human cost in our current energy paradigm.
There are several storage applications under development. Ion Lithium leads the race due to its chemistry and light weight. It can be stored inside or outside and if grid tied without depleting its charge below 20% or being 100% charged too often, it is thought to be able to last for more than 10 years. At a larger scale, perhaps a neighborhood, it can be scaled up the 1-2 gigawatts (1 million watts) without taking up much geography. This chemistry and other chemistries are also being looked at by utility to store off peak power. Currently off peak power pumps water uphill, so that it can use gravity to power turbines when needed. Seems kind of prehistoric to me. Other methods of storing excess power are pumping air compressors that decompress at a later date. Clean, but the power used to store this is dirty or dangerous.
Battery and Flywheel in my opinion are both very promising, as both can store and hold large amounts of power in a small area. Pumped Hydro is the most cost effective, but uses water and quite a large area to store its energy.
Here is an example of two companies producing storage, one is BYD, and the other is TESLA through its partnership with Solar City. And some preliminary information on Flywheel technology.Calculate Savings Now