Big companies are smarter than gov't regulators, they understand their business better, and they have a longer time horizon. So when the government comes around to regulate them, they think "OK, how can we turn this into a huge barrier to entry for new competitors?" They have large lobbyist and strategy budgets. They generally win.
The most misregulated industries in the US are energy, medical, and transportation. So there are lots of glaring inefficiencies, but they are there for a reason. Technologists assume the reason is stupidity and that clever inventions can fix things. Frustration ensues.
For your energy storage system, I suggest you target large energy consumers like manufacturing plants. Big ones have access to spot markets. Give them a system to store energy when it's cheap and deliver it to the machines during the daytime. If you can show <5 year ROI, you'll be able to sell it.
Regulatory oversight is certainly not perfect, or ideal, or even completely beneficial to anyone involved. Unfortunately, it is a necessary evil in any market with a combination of a large enough cost of entry and a captive market in which the majority of customers can't simply opt-out altogether.
Medical insurance is a topical example that immediately comes to mind. Ten people with some resources can't start an innovative new medical insurance company; the costs are just too great. As a result, existing insurance companies have no incentive to compete in terms of price or services, and because a large enough number of people (and businesses) simply have to have insurance, they don't have to worry about their market shrinking too much.
The flap over gas prices a year ago would be another example, and before that, there was California's energy deregulation that resulted in serious problems just a few years ago.
I think that medical insurance here in the USA is particularly bad. Nationalization is also bad, but relatively superior, I think, lowering costs for everyone and improving care in the final analysis. Medical care, and insurance in particular, could be orders of magnitude better, but only if customers actually care about medical insurance. It's not exactly a treasured consumer choice. If health insurance and medical care were rolled in together, and marketed as being about healthy lifestyle choice, then you could get people to take notice. Kaiser Permanente accomplishes some of these goals, but is rather monolithic, and doesn't go far enough.
I've thought about trying to fix health insurance too. Another dramatically huge problem with huge barriers to entry. But maybe there could be a Yelp of health insurance that I could get people to care about. It was one of the 'alternative ideas' I had for that particular YC interview. Telling the partners raised the predictable eyebrows!