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Suppose I am an 11th-level Artificer with a +5 intelligence modifier, and I use my Spell-storing Item feature to store Continual Flame, whose material component is "ruby dust worth 50 gp, which the spell consumes". However, it's not clear whether producing the spell from the item requires this, or indeed any components at all (emphasis and bracketed text added):

While holding the object [in which the spell is stored], a creature can take an action to produce the spell’s effect from it, using your spellcasting ability modifier.

The usage of the item appears consistent with the usual rules for casting spells from items: activating the item to cast the spell is an action, but that action is distinct from the "Cast a Spell" action and doesn't require components. However, if this is the case, it seems that I can use Spell-Storing Item to produce 10 Continual Flame torches (or Arcane Locks) per day without spending any money at all. Does this work as described, or is there some reason that the spell-storing item would require the costly component in order to cast the spell?

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Yes it does!

From the Dungeon Master’s Guide on casting spells from magic items:

Some magic items allow the user to cast a spell from the item, often by expending charges from it. The spell is cast at the lowest possible spell and caster level, doesn’t expend any of the user’s spell slots, and requires no components unless the item’s description says otherwise.

As a spell-storing item is very obviously a magical item, this section from the DMG applies.

Since the description of spell-storing item never states that it requires costly components, this section of the DMG confirms that spells cast through spell-storing item are component free.

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  • \$\begingroup\$ Storing a spell in an item doesn't make it a magic item; according to the latest Sage Advice Compendium, using the action to produce a spell from the Spell-Storing Item can be done with the Use an Object action. That said, the real reason why using a Spell-Storing Item doesn't consume any components is unrelated to that section of the DMG; you're not "casting a spell from the item" at all, only "produc[ing] the spell's effect from it". (I've added an answer focused on this point.) \$\endgroup\$ – V2Blast Oct 4 at 5:55
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Yes, it bypasses the need for components, because you're not casting a spell from (or into) the Spell-Storing Item.

The full description of the artificer's Spell-Storing Item feature reads (E:RftLW p. 58 and WGtE p. 179-180; emphasis mine):

At 11th level, you learn how to store a spell in an object. Whenever you finish a long rest, you can touch one simple or martial weapon or one item that you can use as a spellcasting focus, and you store a spell in it, choosing a 1st- or 2nd-level spell from the artificer spell list that requires 1 action to cast (you needn’t have it prepared).

While holding the object, a creature can take an action to produce the spell’s effect from it, using your spellcasting ability modifier. If the spell requires concentration, the creature must concentrate. The spell stays in the object until it’s been used a number of times equal to twice your Intelligence modifier (minimum of twice) or until you use this feature again to store a spell in an object.

Neither step of this process involves actually casting the spell, as odd as that may seem.

The process of storing the spell just says you touch a weapon or an item that you can use as a spellcasting focus (thieves' tools, any artisan's tools, any of your infused items, other options added by your subclass, etc.), then choose a 1st- or 2nd-level artificer spell (even if you don't have it prepared).

Likewise, the process of producing the effect doesn't actually involve any aspect of casting the spell itself - only creating the spell's effect. Any creature that can hold the object can produce the spell's effect from it a limited number of times (twice your Int mod, or until you use this feature again to store a spell in any object). The creature holding the object maintains concentration if the spell effect requires it, but there's no actual casting of the spell involved.

Someone_Evil's answer to the linked question Do class or subclass features that relate to spellcasting apply when producing a spell's effect from an Artificer's Spell-Storing Item? concurs with this reading of the rules:
Whether the artificer is storing a spell in a Spell-Storing Item, or a creature holding that item produces the spell's effect from it, neither creature actually casts a spell.

Since nobody - neither the artificer, nor the creature holding the object - ever casts the spell for a Spell-Storing Item (whether as part of storing the spell in the item, or producing the spell's effect from the item), no spellcasting components of any kind are necessary: verbal, somatic, or material (costly/consumed or otherwise).

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