The U.S. added 28 GW/58 GWh of new energy storage capacity in 2025, according to a new report by Solar Energy Industries Association (SEIA).

This is the highest-ever energy storage installation in a year.

Despite U.S. policies that disincentivized clean energy projects, battery storage projects grew by 30% YoY in 2025.

The record figure for installations is four times the number three years ago.

In 2025, utility-scale storage projects reached just under 16 GW/50 GWh. The demand for behind-the-meter storage projects stood at 13% of the total market, reaching 12 GW/8 GWh.

As of 2025, 137 GWh of utility-scale storage was installed in the U.S., along with 19 GWh of behind-the-meter storage and 9 GWh of residential storage projects.

In 2025, lithium-ion accounted for 98% of deployments in the U.S.

Utility-Scale Battery Storage Projects

The utility-scale market saw a 29% YoY jump in installations, with particularly strong growth in Texas and Arizona, increasing 67% and 129% YoY, respectively.

Deployments in California saw their first year of decline, down 21% compared to 2024.

Outside of the top three markets, Nevada, New Mexico, Idaho, Oklahoma, and Wisconsin all deployed over 1 GWh of battery storage in 2025, on the back of increased solar deployments.

Average project battery duration fell slightly in 2025 to 3.08 hours compared to 3.15 hours in 2024, a result of California’s reduced market share, where typical battery duration sits at four hours, compared to two hours in Texas.

Residential Battery Storage Projects

Residential battery storage deployments in 2025 reached 3.1 GWh across the U.S., representing a 51% increase from 2024.

California accounted for over 70% of the country’s installations.

The state’s strength in residential storage installations was driven by favorable policies, including the Self Generation Incentive Program (SGIP), tax credits, and NEM 3.0 policy.

In 2025, the U.S. residential storage market was characterized by the end of the Section 25D tax credit and a rush to purchase and install systems before year-end. This led to a pull-forward of installations, usually seen in Q4, into Q2 and Q3, and of 2026 installations into Q4.

Behind-the-Meter Storage Projects

Behind-the-meter deployments in the U.S. commercial and industrial segment reached 2.61 GWh in 2025, a 42% YoY increase.

The growth was strongly driven by two large Tesla Megapack installations at xAI’s Colossus facility, proving a working example of a large-scale data center using battery energy storage systems (BESS) to bridge a grid connection.

Though the data center market offers a significant opportunity for BESS players, early signs indicate a growing preference among data center developers for on-site gas generation, with BESS primarily used for power quality and ramping.

The uninterruptible power supply market is dominated by data centers and telecom, and accounts for only a small proportion of battery demand in GWh, despite accounting for 89% of behind-the-meter power.

The rapid deployment of energy storage in the U.S. is expected to lower energy costs, enhance reliability, and boost its energy independence.

Standalone storage made up nearly 30 GWh of new capacity added in 2025, while storage paired with solar accounted for 20 GWh.

In 2025, battery cell manufacturers pivoted from electric vehicle manufacturing towards dedicated energy storage production, converting existing lines and changing plans.

As of 2025, lithium-ion battery cell manufacturing for stationary electricity storage applications rose to over 21 GWh, according to SEIA’s Solar and Storage Supply Chain Dashboard, enough to power the city of Houston from sunset to sunrise.

As of 2025, the U.S. can manufacture 69.4 GWh of battery storage systems.

The report also noted that two-thirds of all utility-scale energy storage capacity installed in 2025 was built in states won by President Donald Trump, including 9 of the top 15 states for new installations.

According to the report, Texas is set to overtake California as the largest energy storage market in the country in 2026.

Darren Van’t Hof, Interim President and CEO at SEIA, said that whether it’s solar-plus-storage solutions or standalone battery storage projects, they lower consumer costs, make the grid more reliable, and keep power on in homes during outages.

He added that deployment is rising fast, but without a course correction from federal actions targeting the industry, Americans will face higher electricity prices and a less resilient energy system.

Outlook

U.S. battery storage deployments are set to increase to 35 GW/70 GWh in 2026, with the utility-scale market accounting for 20.2 GW/62.4 GWh and the behind-the-meter market accounting for 14.8 GW/7.3 GWh.

According to SEIA’s projections, cumulatively, over 600 GWh of energy storage projects are expected to be commissioned by 2030.

The report estimated that the industry would require $25.2 billion in capital investment to complete these projected battery storage deployments.

By 2030, the market is set to exceed 47 GW/110 GWh in annual installations. By 2030, cumulative installed utility-scale BESS is set to reach just under 500 GWh.

In 2026, the current pipeline of utility-scale battery storage projects planned to come online totals over 90GWh; however, only 62GWh is likely to come online due to delays and cancellations.

In the residential market, deployments are forecast to decrease in 2026 and remain dampened through 2030, following the surge in installations. However, the underlying electricity market dynamics will help support the industry in the long term.

The growing presence of virtual power plants in states such as Massachusetts, California, Texas, Arizona, and Colorado will continue to incentivize at-home grid response.

Given the tightening of grid capacity and the short supply of gas turbines, developers will be forced to consider other on-site generation options to help projects come online. By 2030, the report projects that data centers will account for 83% of behind-the-meter commercial and industrial installations in the U.S.

By 2030, lithium-ion’s share in the battery storage market is expected to decrease to around 90%, as alternative technologies, such as sodium-ion, zinc-based, metal-air, and flow batteries, gain momentum.

Additionally, within lithium-ion, LFP’s dominance is set to strengthen as developers continue to move away from nickel-based chemistries, which currently account for ~7% share of lithium-ion cathodes.

According to BloombergNEF’s Levelized Cost of Electricity 2026 report, the cost of battery storage projects reached all-time new lows in 2025, even as the cost of other renewables saw an increase.

The global energy storage market grew 43% year over year in 2025, adding 106 GW of new capacity worldwide, a significant increase from 73 GW in 2024, according to Wood Mackenzie.