The energy storage market in the US is booming, with the first quarter of 2025 marking the biggest Q1 ever in history. According to the latest US Energy Storage Monitor from Wood Mackenzie and the American Clean Power Association (ACP), over 2 gigawatts (GW) of capacity were added across all segments.
Utility-scale projects led the surge, accounting for over 1.5 GW of the new capacity, a 57% increase compared to Q1 2024. John Hensley, SVP of markets and policy analysis at ACP, highlighted the importance of energy storage in supporting the growing energy demand and keeping the grid reliable.
However, despite the strong growth, there are concerns about policy uncertainty that could hinder future expansion. One state that showcases the potential of energy storage is Indiana, which added 256 MW of new capacity in Q1, quadrupling its total installed capacity. The state now has over 10 GW of new storage in its interconnection queue, making it the fifth-largest in the country.
Residential storage also saw a record-breaking quarter, with 458 MW installed. California and Puerto Rico led the way in this segment, accounting for 74% of the growth. Emerging markets like Illinois are also starting to pick up pace in adopting home batteries.
Looking ahead, the long-term outlook for energy storage is cloudier due to potential changes in federal policy. Proposed alterations to the Investment Tax Credit (ITC) could significantly impact future growth, with the potential for a 27% decrease in total storage buildout over five years.
The report expects 15 GW/49 GWh of new storage capacity to be installed in 2025 across all segments, with utility-scale installations projected to grow by 22% year-over-year. However, there is a risk of a 29% contraction in the utility-scale segment in 2026 due to policy uncertainty.
In conclusion, while the energy storage boom in the US shows no signs of slowing down yet, the industry is facing challenges ahead. All eyes are on Congress as potential policy changes could disrupt the momentum of this growing market. It is crucial for stakeholders to monitor these developments closely to ensure the continued growth and success of the energy storage industry.
