REPORT: 2025 U.S. Energy Storage Installations Set New Record, Surpass 2024 by 52%
Mar 24 2026
- The U.S. installed 18.9 GW of utility, C&I, and residential battery energy storage systems in 2025
- Q4 2025 set quarterly record with 5.8 GW installed
- The U.S. is projected to install 500 GWh of storage from 2026-2031, a 250% increase over 2020-2025
WASHINGTON, D.C., March 24, 2026 — The U.S. energy storage market hit a record 18.9 gigawatts of battery energy storage system installations in 2025, a 52% increase over 2024, according to the latest U.S. Energy Storage Monitor report released today by the American Clean Power Association (ACP) and Wood Mackenzie.
In a year of record growth, Q4 of 2025 closed with the strongest quarterly totals on record with 5.8 GW installed. Utility scale installations accounted for 4.9 GW of the Q4 total, a 31% increase over the previous year. New activity was spread across 13 different states, demonstrating market diversification outside of California and Texas, which have historically dominated utility-scale battery energy storage deployment.
The U.S. residential storage market also hit a quarterly milestone in Q4 with 1 gigawatt hour (GWh) installed as tax incentive expiration dates accelerated demand. The residential market installed a total of more than 800 megawatts (MW) in 2025, a 75% year-over-year increase. California led in growth, installing 700 MW more in 2025 than it did in 2024, driven by high retail electricity rates and a net billing tariff incentivizing battery discharge during peak energy usage hours. Puerto Rico, Texas, Arizona, and Illinois rounded out the top five markets for storage growth in 2025.
The Community, Commercial and Industrial (CCI) market also saw record growth with 77 MW installed in Q4 2025 as state policies boosted deployments.
“The record-breaking energy storage growth seen in 2025 highlights how technology innovation is transforming America’s grid,” said John Hensley, Senior Vice President of Markets and Policy Analysis at ACP. “This momentum, driven by supportive policy and expanding market opportunities, demonstrates that large-scale storage is now a cornerstone of delivering affordable, reliable, and American-made energy in communities nationwide. Continued collaboration across industry and government will be essential to building on this progress and meeting soaring energy demand.”
U.S. Installations to surpass 28 GW by 2031 across all segments
Momentum will continue for the battery energy storage market, according to Wood Mackenzie’s five-year outlook. The report projects that the U.S. will install half a TWh of storage between 2026-2031, a 250% increase over the previous five-year period. Annual utility additions will lead the way, doubling between 2025 and 2030 in GWh installed. A previously anticipated near-term market contraction for utility installations is also no longer expected, as a record-breaking number of projects started construction in 2025 to lock in the previous federal Investment Tax Credit (ITC) requirements. Demand for residential storage rose in 2025 as consumers took advantage of the expiring Section 25D ITC, but the residential market is expected to contract by 2% in 2026 with the expiration of the tax credit. Annual CCI storage installations are also expected to grow by 39% between 2025 and 2030 as continued system costs declines and further policy support expand profitable business cases.
“2025 was a banner year for the energy storage market,” said Allison Feeney, research analyst at Wood Mackenzie. “Declining system costs, supportive policies and growing revenue opportunities have all contributed to impressive growth over the last six years. We expect this momentum to continue as the technology becomes even more proven and widely adopted.”
Despite continued growth, 52 GW hangs in balance over regulatory uncertainty and variable demand growth scenarios
Wood Mackenzie assessed high-case and low-case five-year outlook scenarios for battery energy storage deployment in the report. The high-case would result in approximately 36 GW of new battery energy storage deployed in 2031, assuming higher demand growth, federal permitting relief, and that storage technology retains easier access to tax credits in the One Big Beautiful Bill Act (OBBBA) through workable Foreign Entity of Concern (FEOC) guidance increasing domestic system and cell supply. However, the low case results in 17% less capacity than the base case. This scenario assumes an increase in protectionist trade barriers that raise system costs and a lower level of load growth.
Allison Weis, Global Head of Storage at Wood Mackenzie, said, “The market trajectory is strongly upward, but large load buildout and federal policy will determine whether we reach the high case of 26 GW by 2031 or something more conservative.”
Notable Market Developments:
- The residential market hit a record high in 2025 with 2.7 GW installed, a 92% increase from 2024.
- Over 50 GW/144 GWh of cumulative energy storage has been installed in the US since 2019, with average annual installations growing 107% year-over-year on a MWh basis.
- Utility-scale battery system price (US/$kW) increased 23% year-over-year.
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