The US energy storage market reached a new record in 2025, driven by utility-scale expansion and rapid residential growth, confirming storage as a core pillar of the power system
In 2025, the US energy storage market reached a new all-time high with 18.9 GW and 51 GWh installed, marking a 52% increase compared to 2024 and reinforcing the central role of storage in the American power system.
The data comes from the US Energy Storage Monitor by Wood Mackenzie and American Clean Power. Growth was primarily driven by utility-scale projects. The fourth quarter of 2025 recorded a peak of 5.8 GW installed, the highest quarterly level ever reached.
The market is also expanding geographically.
Installations are now spread across a growing number of states, reducing the historical dominance of California and Texas. At the same time, the residential segment is accelerating due to expiring tax incentives, while the commercial segment continues to grow at a slower but steady pace.
How much energy storage capacity was installed in the US in 2025?
In 2025, the United States installed 18.9 GW of energy storage systems, equivalent to 51 GWh, marking a 52% year-over-year increase.
The data confirms structural growth in the sector. Between 2019 and 2025, more than 50 GW and 144 GWh were installed overall, with an average annual growth rate of 107% in energy terms (MWh).
This record expansion is supported by three main factors. First, declining system costs. Second, the federal incentive framework, particularly tax credits. Third, increasing revenue opportunities linked to grid services and peak demand management.
In the fourth quarter alone, installations reached 5.8 GW, highlighting strong acceleration toward the end of the year.
Utility-scale dominates US energy storage expansion
The utility-scale segment remains the main driver of the US energy storage market. In 2025, more than 16 GW were installed in this segment, with nearly 5 GW added in the fourth quarter alone.
Utility-scale installations grew by 48% in power (MW) and 40% in energy (MWh) compared to 2024.
A key trend is geographic diversification. Projects were deployed across 22 states in 2025 and in 13 states in the fourth quarter alone, signaling a market that is becoming less concentrated.
Growth is supported by multiple factors. Tax credits remain critical. System costs continue to decline. Electricity demand is rising, particularly during peak hours.
According to market forecasts, the utility-scale segment will continue to expand at an average annual rate of 16% in the coming years, consolidating its central role in the energy system.
Why is the residential segment growing faster?
The residential segment is the fastest-growing part of the US energy storage market, with installed capacity increasing by 92% in 2025. Overall, the segment reached 2.7 GW installed, with strong momentum in the fourth quarter.
Growth is primarily driven by tax incentives. The upcoming expiration of residential tax credits pushed households and installers to accelerate investments.
California leads the market, adding 700 MW more than in 2024, supported by high electricity prices and mechanisms that encourage battery use during peak hours.
Other expanding markets include Puerto Rico, Texas, Arizona, and Illinois. However, a slight contraction of 2% is expected in 2026, mainly due to the phase-out of the most favorable incentives.
Commercial and industrial storage sees steady growth
The commercial, industrial, and community segment shows more moderate but stable growth. In 2025, 95.6 MW were installed, marking a 16% increase compared to 2024.
The fourth quarter saw a peak of 77 MW, supported by favorable state-level policies.
California remains the leading market, with record installations in Q4. At the same time, new states such as New Mexico are entering the sector.
This segment benefits from local incentives and the growing need for energy flexibility solutions among businesses and communities.
Forecasts indicate a 39% increase between 2025 and 2030, driven by cost reductions and evolving business models.
US energy storage outlook through 2031
Projections point to significant expansion of energy storage in the United States. Between 2026 and 2031, around 0.5 TWh of capacity will be installed, representing a 250% increase compared to the previous five-year period.
By 2031, annual installations are expected to exceed 28 GW.
The utility-scale segment will continue to dominate, with annual installations doubling between 2025 and 2030 in energy terms.
However, the market remains exposed to regulatory uncertainty. Scenario analyses indicate a potential gap of 52 GW between the most favorable and most restrictive cases.
In the most optimistic scenario, stronger demand and supportive policies could accelerate deployment further. In a more conservative outlook, trade barriers and regulatory constraints could slow the pace of growth.
