June 25, 2025
Despite uncertainty from Washington, the American market for energy storage has a record growth in the first quarter of 2025, according to the latest US Energy Storage Monitor Wood Mackenzie and the American Clean Power Association (ACP).
The Report shows That the American market for energy storage has added more than 2 GW more than 2 GW in the first quarter of this year, so that the highest Q1 ever has been registered. The segment on Nuts scale was at the forefront of more than 1.5 GW new capacity, which represents a significant increase of 57% compared to Q1 2024.
“The rising energy demand is the electric grid under voltage. The market for energy storage reacts to maintain the lights and to support this unprecedented growth in an affordable and reliable way,” said John Hensley, Senior VP of ACP of markets and policy analysis. “Policy uncertainty is now one of the most important risks that remain on the horizon, while tackling a balanced approach to expand our economy while maintaining the energy reliability that Americans earn.”
Growing market segments
Based on the findings of the report, there is a growing appetite throughout the country for the use of energy storage on the grid, because utilities, regulators and communities further integrate the technology into their resource planning. In the first quarter of 2025, states such as Indiana emphasized the geographical diversification that continues as the market goes beyond Early Adopters such as Texas and California.
The growing market in Indiana is made possible because of factors such as the availability of land and the guidelines of the clear condition.
- Indiana added 256 MW of new storage to the grid in Q1 2025, so that the operational storage capacity effectively quadrupled.
- Indiana has more than 10 GW new storage that is active in the queue with interconnection – the fifth largest storage riding row in the country.
“We now see a significant use of energy sources for energy storage in emerging markets such as Indiana, while states in the southwest such as Nevada and Arizona continue to expand their energy storage portfolio,” said Noah Roberts, ACP VP of energy storage. “Energy storage was the second most implemented source in Q1 2025, which demonstrated that the unique ability to be built quickly to meet the needs of critical reliability.”
The residential storage market also saw a significant growth on an annual basis (YOJ) and installed a record -breaking 458 MW in Q1. California and Puerto Rico accounted for 74% of this growth, while new markets such as Illinois begin to arise.
Policy uncertainty
The report indicates that the total capacity prediction of five -year utilities remains strong. However, the segment runs in the risk of a potential contraction of 29% in 2026 due to policy uncertainty.
The community scale, commercial and industrial (CCI) segment has seen a reduction of 42% in its five-year prospects, struggling with tariff uncertainty and slower than mitigating transition to NEM 3.0 projects in California.
The report warns that potential changes in current tax credits can significantly influence the general growth of the industry. If access to the investment tax (ITC) is seriously reduced as proposed in the reconciliation account that the house has been adopted, this can lead to a reduction of 27% in the construction of the prediction period. (Note: This report was developed before the US Senate Financing Committee released its version of the Reconciliation Bill on 16 June.)
Distributed storage would be the most affected segment, with a potential decrease of 46% of the basicase in the next five years. Installations on Nuts scale would decrease by 16 GW in the coming five years if the tax facilities are changed.
In the short term, the report projects that 15 GW / 49 GWH will be installed in energy storage capacity in all segments in 2025. The segment on Nuts interest is expected to grow 22% yoj in 2025.
As the market evolves, continuous innovation, supporting policy and strategic planning will be crucial to navigate and take advantage of the immense potential of energy storage in the American energy transformation through the changing landscape.
“The results of the first quarter of 2025 show the demand for energy storage in the US to serve a grid with both growing renewable energy sources as a growing load. However, the industry is at a crossroads, with potential policy changes that are in danger of disrupting this momentum,” said Allison Weis, head of energy storage at Wood Mackenzie. “It is crucial that policy makers understand the importance of stable, supporting policy for the continuous expansion of energy storage.”
The Full report is available on the ACP website.
Tags: American Clean Power Association, Energy Storage, Wood Mackenzie
