U.S. energy storage installations hit record numbers in 2025, report says

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<p>The American energy storage market set a record for new installations in 2025, according to <a href="https://www.woodmac.com/">Wood Mackenzie</a> and the <a href="https://cleanpower.org/">American Clean Power Association&#8217;s (ACP)</a> new <a href="https://www.woodmac.com/industry/power-and-renewables/us-energy-storage-monitor/?utm_campaign=pandr-lenspr-g&amp;utm_medium=social&amp;utm_source=press-release&amp;utm_content=ESM-Q1-2026">U.S. Energy Storage Monitor report</a>.</p>

<p>Recording 18.9 GW of BESS installations last year, the industry posted a 52% increase over its 2024 number, the companies say. Q4 2025 closed with the strongest quarterly total on record with a total of 5.8 GW installed, and utility-scale installation accounted for 4.9 GW (about 84.5%) of that figure.</p>

<p>&#8220;The record-breaking energy storage growth seen in 2025 highlights how technology innovation is transforming America&#8217;s grid,&#8221; says John Hensley, SVP of markets and policy analysis at ACP. &#8220;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. </p>

<p>&#8220;Continued collaboration across industry and government will be essential to building on this progress and meeting soaring energy demand.&#8221;</p>

<h3 class="wp-block-heading" id="h-breaking-down-market-developments">Breaking down market developments</h3>

<p>2025 was a &#8220;banner year&#8221; for storage in America, according to Allison Feeney, a research analyst at Wood Mackenzie. Utility-scale storage saw installations across 22 states throughout the year and 13 states in Q3 alone, allowing some regional diversification in a market previously dominated by California and Texas.</p>

<p>&#8220;Declining system costs, supportive policies and growing revenue opportunities have all contributed to the impressive growth over the last six years,&#8221; Feeney says. &#8220;We expect this momentum to continue as the technology becomes even more proven and widely adopted.&#8221;</p>

<p>The <a href="https://solarbuildermag.com/energy-storage/report-residential-solar-storage-prices-dropped-to-new-lows-in-2024/">residential storage segment</a> saw the biggest spike in 2025, with installation figures marking a 92% increase over 2024. California led year over year growth with a 700-MW increase over last year thanks to high retail rates and net billing tariff implementation.</p>

<p>The CCI segment of the industry installed 95.6 MW of storage last year, good for a 16% increase over 2024. The report says the nation&#8217;s distributed energy segment grew in Q4, thanks in large part to bolstered policy measures at the state level.</p>

<p>&#8220;California led the market with record high Q4 installations of 45 MW,&#8221; the report states. &#8220;With the Net Billing Tariff (NBT) incentivizing storage, California is expected to sustain growth through 2026. New Mexico also delivered a record quarter with 5.9 MW installed, signaling a potential new market for C&amp;I storage.&#8221;</p>

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<h3 class="wp-block-heading" id="h-forecasting-the-future-of-storage">Forecasting the future of storage</h3>

<p>Storage is no longer a perk of some solar projects; it&#8217;s moving <a href="https://solarbuildermag.com/energy-storage/home-storage-ai-vpps-obbba-and-other-acronyms-shaping-the-ess-market/">closer to being a basic necessity</a> for the industry at large. The report states that the U.S. is set to install 500 GW of storage capacity from 2026 to 2031, making up two and a half times more than what was installed in the first half of the 2020s.</p>

<p>&#8220;The market trajectory is strongly upward,&#8221; says Allison Weis, global head of storage at Wood Mackenzie, &#8220;but large load buildout and federal policy will determine whether we reach the high case of 26 GW by 2031 or something more conservative.&#8221;</p>

<p>That base case does have room for even further upside for storage, however. The report says the high case results in 20% more storage capacity installed by 2031, than the base case&#8217;s 500 GW mark.</p>

<p>&#8220;The high scenario assumes that storage retains access to tax credits as written in the OBBBA and federal headwinds ease through workable <a href="https://solarbuildermag.com/policy/treasury-issues-feoc-guidance-for-solar-developers-manufacturers/">FEOC guidance</a>,&#8221; the report says. &#8220;This results in lower trade tensions and federal permitting relief and consequently higher utility-scale deployments at the end of the forecast.&#8221;</p>

<p>In the low case scenario, 24 GW less storage will be deployed by 2031. The case assumes that &#8220;restrictive FEOC guidance&#8221; makes tax credits difficult to earn for ESS and BESS projects. Weaker power demand — likely from the popping of a hypothetical AI bubble, among other factors — would also soften demand for storage in utility-scale projects.</p>
<p>-- Solar Builder magazine</p>