U.S. Energy Storage Installations Reach Record 18.9 GW in 2025

The U.S. battery energy storage market reached 18.9 gigawatts (GW) of installations in 2025, a 52% increase over 2024, according to the U.S. Energy Storage Monitor report published by the American Clean Power Association (ACP) and Wood Mackenzie. The total covers utility, community, commercial, industrial and residential installations across the country. ACP and Wood Mackenzie publish this report jointly each quarter.

A record fourth quarter for utility storage

The fourth quarter of 2025 recorded 5.8 GW of installations, the highest quarterly total on record. The utility segment accounted for 4.9 GW, up 31% year-on-year. New capacity was spread across 13 different states, according to the report, signaling geographic diversification beyond California and Texas, which have historically dominated this market. Transgrid secures up to 2 GW of batteries to strengthen the NSW grid, a move that reflects the global momentum behind large-scale grid storage projects.

The residential market surpassed 1 gigawatt-hour (GWh) installed in Q4, driven by approaching tax incentive deadlines. For full-year 2025, the segment totaled more than 800 megawatts (MW), up 75% year-on-year. California installed 700 MW more than in 2024, supported by high retail electricity rates and a net billing tariff incentivizing battery discharge during peak hours. Puerto Rico, Texas, Arizona and Illinois rounded out the top five residential storage markets by growth.

The C&I segment and industry commentary

The Community, Commercial and Industrial (CCI) market installed 77 MW in Q4 2025, also a record, driven by state-level policy support. John Hensley, Senior Vice President of Markets and Policy Analysis at ACP, stated that "technology innovation is transforming America's grid" and described utility-scale storage as "a cornerstone of delivering affordable, reliable, and American-made energy in communities nationwide." He added that "continued collaboration across industry and government will be essential to building on this progress and meeting soaring energy demand." These statements come from official ACP communications.

Allison Feeney, research analyst at Wood Mackenzie, described 2025 as "a banner year for the energy storage market." She attributed the results to "declining system costs, supportive policies and growing revenue opportunities" built up over six years. She expects "this momentum to continue as the technology becomes even more proven and widely adopted."

Outlook: 0.5 TWh between 2026 and 2031

Wood Mackenzie projects the U.S. will install half a terawatt-hour (TWh) of storage between 2026 and 2031, a 250% increase over the previous five-year period. Annual utility additions are expected to double between 2025 and 2030 in gigawatt-hours installed. A previously anticipated near-term market contraction for utility installations is no longer expected, as a record number of projects started construction in 2025 to lock in previous federal Investment Tax Credit (ITC) requirements. The CRE proposes adapting support for large photovoltaic installations with storage, reflecting a global trend to integrate storage into renewable energy support frameworks.

The residential market is expected to contract by 2% in 2026 with the expiration of the Section 25D tax credit, following strong demand driven by the approaching deadline. The CCI segment is projected to grow 39% between 2025 and 2030, driven by continued cost reductions and expanding profitable business cases, according to Wood Mackenzie. Annual installations are expected to surpass 28 GW across all segments by 2031 under the base case scenario, per the report.

52 GW in the balance depending on regulatory scenarios

Wood Mackenzie modeled two scenarios to 2031. In the high case, approximately 36 GW of new battery energy storage would be deployed in 2031, assuming higher demand growth, federal permitting relief and preserved access to tax credits under the One Big Beautiful Bill Act (OBBBA), with workable Foreign Entity of Concern (FEOC) guidance increasing domestic system and cell supply. The low case results in 17% less capacity than the base case, weighed down by protectionist trade barriers and lower load growth. According to the report, approximately 52 GW of capacity remain contingent on regulatory uncertainty and demand growth scenarios.

Allison Weis, Global Head of Storage at Wood Mackenzie, said "the market trajectory is strongly upward." She noted, however, that "large load buildout and federal policy will determine whether we reach the high case of 26 GW by 2031 or something more conservative." These projections reflect the regulatory uncertainties that the report identifies as determinative for the future of the U.S. storage market.