The United States added 18.9 GW of energy storage capacity in 2025, a 52% increase year-over-year, according to Wood Mackenzie.
According to the quarterly report, the United States energy storage market installed 18.9 GW and 51 GWh of capacity in 2025.Energy storage monitor” report from Wood Mackenzie. This volume represents a 52% increase in installations compared to 2024 levels.
The last quarter of the year set a record for quarterly activity with 5.8 GW and 14.8 GWh deployed across all segments. Since 2019, the country has installed more than 50 GW and 144 GWh of storage capacity.
Market growth continues to be driven by declining system costs, federal policies and revenue opportunities. Average annual installations have grown 107% on a MWh basis over the past six years.
The segment’s performance varied through 2025, with utility-scale storage accounting for the majority of capacity, while the residential sector saw the highest year-over-year growth rate.
Utility-scale storage installations reached 16 GW for the full year. In the fourth quarter, 4.9 GW was deployed in this segment. Growth in this sector occurred in 22 states during the year and in 13 states during the fourth quarter. The geographic spread indicates diversification beyond the California and Texas markets.
Drivers for utility-scale implementation include tax incentives, system costs, and offtake agreements with utilities. The utility-scale pipeline includes 152 GW of projects in databases and 530 GW of projects in interconnection queues from Q4 2025.
The residential segment installed 2.7 GW in 2025. This total represents a capacity increase of 92% compared to 2024. In the fourth quarter, residential storage exceeded the 1 GWh threshold for the first time.
The demand in this segment was due to the expiry of the Section 25D Investment Tax Credit (ITC) at the end of the year. California continued to lead residential storage, installing 700 MW more than the previous year. Puerto Rico, Texas, Arizona and Illinois followed as top markets for growth.
The community-scale, commercial and industrial (CCI) segment installed 95.6 MW in 2025. This volume is an increase of 16% compared to 2024.
During the fourth quarter, the segment reached 77 MW of installations. State-level policies supported the growth of community storage options. California led the segment with 45 MW of installations in the fourth quarter. New Mexico also recorded 5.9 MW of installations during the same period.
Forecasters expect the United States to add 500 GWh of storage capacity between 2026 and 2031. This volume would represent an increase of 250% compared to the period from 2020 to 2025.
Utility-scale storage is expected to grow by an average of 16% per year. Growth is expected to be supported by federal stimulus, tax growth and peak power demand. The transition to domestic cell production is also expected to support the segment over the next five years.
The CCI segment is expected to grow 39% between 2025 and 2030. While a decline in installations is expected in 2026 due to project shifts in Illinois, growth is expected to continue due to system costs and access to tax credits. California, Massachusetts and New York are expected to remain the markets anchoring this segment.
Residential storage is expected to shrink by 2% in 2026 after the expiration of the ITC. This projection is an update of an earlier forecast of a 6% contraction. The revision is due to interconnection backlogs and momentum in third-party ownership models.
High and low deployment market scenarios for the period through 2031 include a range of 52 GW of potential installations. This range is due to uncertainty surrounding freight growth, trade policy and Foreign Entities of Concern (FEOC) guidelines.
A high-case scenario suggests an increase of 28 GW if FEOC guidelines are workable for the industry and trade barriers decrease. A low-case scenario indicates 17% less capacity than the base case if stricter guidelines and development barriers slow progress.
Specific assumptions for these scenarios relate to the availability of tax credits, supply chain constraints and interest rates. The base case assumes that the Federal Reserve will make three interest rate cuts in 2026, with interest rates remaining between 2.5% and 3.5% until 2030. Demand forecasts for major interest expansion also vary across scenarios.
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