Europe’s battery energy storage market grew by 15% in 2024, according to the European Market Outlook for Battery Storage 2025-2029 report by SolarPower Europe. However, the growth had slowed year-over-year (YoY).

The continent installed 21.9 GWh of battery energy storage systems (BESS) in 2024, achieving record installations for the eleventh consecutive year and increasing Europe’s total battery capacity to 61.1 GWh. The annual capacity installation growth rate reduced to 15% after three continuous years of doubling the newly added capacity.

The report said Europe’s BESS market is expected to grow faster in the coming two years, but not at the required levels. The continent is projected to install 29.7 GWh of battery storage, a 36% YoY growth. The report expects a six-fold increase in installed capacity to approximately 120 GWh by 2029, growing the total capacity to 400 GWh.

However, this growth would be considerably less than the required levels to meet Europe’s energy flexibility needs. The European Union (EU) must install a BESS capacity of 780 GWh by 2030 to fully support the renewable energy transition, according to SolarPower Europe’s Mission Solar 2040 report.

Leading Countries

Germany, Italy, and the UK continued to lead the European market, installing nearly 70% of the annual BESS capacity. The countries installed 6.2 GWh, 6 GWh, and 2.9 GWh capacity, respectively. Austria followed with 1.1 GWh and Sweden with 1 GWh, reaching the gigawatt-hour scale for the first time. The top five countries added 78% of the total installed capacity in Europe in 2024.

Germany installed the highest capacity despite reducing residential installations and decreasing large battery uptake. Italy’s residential installations also reduced. However, its large-scale segment capacity increased. The UK experienced a temporary slump because of project delays at the large-scale level. Austria and Sweden experienced considerable growth in the residential, commercial and industrial (C&I) markets.

Outlook

Europe deployed 29.7 GWh of battery storage in 2025 under the medium term, expecting to help the market grow at 36% annually. This growth in 2025 would entail installing approximately half of the total operating fleet implemented in 2024.

The continent’s installations are projected to increase sharply in the medium scenario beyond 2025 under the current market and regulatory conditions. Annual deployments are expected to grow by 41.9 GWh or 41% in 2026 and 68 GWh or 62% in 2027.

Annual growth rates are expected to slow when markets mature slowly by the decade’s end. However, the report predicts continued deployment expansions, achieving 90.8 GWh in 2028 (increasing 34%) and 118 GWh in 2029 (increasing 29%). This increase would constitute an over five times growth of installation volume from 2024.

The report said the European utility-scale battery market would likely almost double in 2025 to compensate for the overall stagnation in the behind-the-meter (BTM) segment, which is projected to provide less than a third of the capacity by 2029.

Large-scale batteries provided 55% of the new capacity in Europe so far in 2025. Their contribution is expected to increase, with the share of grid-scale BESS growing to 68% of the annual additions by 2029. Large-scale batteries will deliver over 80 GWh of capacity during this year, more than five times that of 2024.

This segment’s growth will be driven by multiple factors, including the energy security imperatives, the integration of more renewables, strong climate commitments, favorable economics against conventional power generators, and new aid schemes.

The continent’s C&I segment is growing at a pace below its true potential. This segment is projected to increase slightly in the future as businesses opt for energy security and cost-effectiveness offered by solar and storage systems.

Europe’s household battery installations are expected to reduce again. Residential batteries have historically driven Europe’s battery storage market. However, 2025 is expected to witness a 33% drop in such batteries. The waning energy crisis and phased-out support schemes are causing European citizens to become less inclined to install batteries at home.

The report states that energy resilience and independence would require improved regulatory and financial conditions to boost the small-scale segment.

Options for Policymakers

According to the report, European policymakers can help improve battery storage in the continent by accelerating energy storage adoption across the EU and implementing a unified action plan to address regulatory, financial, and market barriers, while supporting battery integration for energy security, flexibility, and decarbonization. Key steps include publishing grid capacity maps, removing excessive charges, adopting shallow connection cost models, and enabling hybrid solar-plus-storage participation in auctions. Market design reforms must support flexibility needs, update guarantees of origin, and simplify prequalification and technical standards for balancing markets. Enhancing communication between BESS, grid operators, and energy management systems, along with advancing smart meter rollout and telemetry standards, is also critical for real-time energy management.

In 2024, lithium-ion battery pack prices dropped 20% from 2023 to a record low of $115/kWh, the most significant annual decline since 2017, according to BloombergNEF.

According to the International Energy Agency, electric car sales worldwide surged by 25% in 2024, reaching 17 million units, pushing annual battery demand beyond the 1 TWh mark for the first time.