Storage is an extremely important area of research and has the potential of furthering the integration of renewables in the grid. The concept proposed here is to design a ceramic-based surface-mounted permanent-magnet (PM) motor/generator for the modular flywheel storage units those are distributed to allow local generation to be used for consumption locally, thus avoiding losses on the transmission and distribution grid as much as possible. Use of ceramic magnets is advantageous because of their higher operating temperatures, easy availability at lower cost, and lower iron losses owing to lower operating flux densities. A 2.5 kW, 24,000 rpm, surface-mounted PM Motor suitable for a 10-kWh storage system is designed and then analyzed using the Finite Element Method. The designed motor with the airgap flux density of 0.3 T results in over 98 percent efficiency, negligible rotor losses, and very low torque ripple of 6.25%.