According to the latest report jointly released by the American Clean Energy Association (ACPA) and Wood Mackenzie (Wood Mackenzie), the US energy storage market will usher in explosive growth in 2025. The total installed capacity of battery energy storage systems reached 18.9 gigawatts (GW) that year, up 52% year-on-year, a record high. Among them, utility-scale (Utility-scale) projects dominate. In the fourth quarter alone, 5.8 gigawatts were added, setting a new quarterly record.

Utility-scale projects contributed most of the increase, adding 4.9 GW in the fourth quarter, up 31% YoY. The installation record is spread across 13 states, marking a geographical expansion of the market from traditional strong regions (such as California and Texas) to a wider region. Household energy storage also set a new milestone, with total installed capacity exceeding 800 megawatts (MW) in 2025, up 75% year-on-year, with 1 gigawatt hour (GWh) deployed in the fourth quarter. This growth was mainly due to the expiring tax incentives, which accelerated user adoption. California tops the market, followed by Puerto Rico, Texas, Arizona and Illinois. The industrial, commercial and community energy storage sectors also grew, adding 77 MW in the fourth quarter, partly due to state-level policy incentives.

Looking ahead, the report predicts that the market will continue to expand. It is estimated that by 2031, the total installed capacity of each segment in the United States will exceed 28 GW. Between 2026 and 2031, the market's energy storage capacity is expected to increase by 0.5 terawatt-hours (TWh), an increase of 250 percent over the previous five-year cycle. Utility-scale deployment will be the main driver, with annual new installations expected to double between 2025 and 2030. The previously expected short-term slowdown is no longer a positive view, as a large number of projects will start construction in 2025 to meet the requirements of the federal investment tax credit (Investment Tax Credit)(note: the US federal government's tax incentives for energy projects). Affected by the expiration of the Section 25D tax credit (note: tax benefits for residential energy systems), the residential energy storage growth component once accelerated, but is expected to decline slightly in 2026. At the same time, industrial and commercial energy storage installations are expected to grow by 39% between 2025 and 2030, benefiting from falling system costs and policy support.

Despite the positive outlook, the report notes that future deployment levels remain sensitive to policy and market conditions. Wood Mackenzie's analysis suggests that potential capacity of up to 52 GW may be affected by regulatory uncertainty and different demand growth scenarios. With regard to the high and low forecast scenarios for 2031, the differences stem from factors such as federal approvals, trade policies, and access to tax incentives. In addition, data shows that since 2019, the cumulative installed energy storage capacity in the United States has exceeded 50 GW (about 144 GWh). During this period, the average annual growth rate reached 107 per cent (in megawatt-hours). The report also notes that utility-scale battery system prices rose 23% year-over-year in 2025.