The US battery storage market just had its biggest quarter ever. In Q2 2025, a record 5.6 gigawatts (GW) of new capacity came online, according to the latest US Energy Storage Monitor report from the American Clean Power Association (ACP) and Wood Mackenzie.
Utility-scale storage leads the charge
Most of that Q2 growth came from utility-scale projects, which added 4.9 GW – enough to power 3.7 million homes during peak demand. As electricity demand climbs and prices rise, more states are turning to large-scale batteries to keep the grid stable and affordable.
Texas, California, and Arizona each added more than 1 GW of new capacity. The Southwest Power Pool, which hadn’t seen new battery storage projects in three years, saw a comeback with three installations in Oklahoma. Meanwhile, Florida and Georgia are now forecast to deploy more storage than expected after major new procurements by utilities.
“Energy storage is being quickly deployed to strengthen our grid as demand for power surges and is helping to drive down energy prices for American families and businesses,” said Noah Roberts, ACP’s vice president of energy storage. “Despite regulatory uncertainty, the industry is on track to produce enough grid batteries in US factories to meet 100% domestic demand.”
Home batteries are booming
The residential battery storage market also surged, adding 608 megawatts (MW) in Q2, up 132% year-over-year and 8% from Q1. California, Arizona, and Illinois led the growth as more homeowners paired batteries with rooftop solar and adopted higher-capacity systems.
CCI market grows slowly
The community, commercial, and industrial (CCI) segment grew by a smaller 38 MW, up 11% year-over-year. California and New York made up more than 70% of Q2’s CCI capacity, while Illinois gained ground. But community-scale storage remains limited due to high costs and policy barriers.
Outlook: Resilient growth, but headwinds ahead
The ACP/Wood Mac report forecasts 87.8 GW of US storage by 2029, with residential and utility-scale projects in the lead. But growth could dip 10% in 2027 as new federal rules take effect on where battery cells can be sourced.
“Pricing and FEOC [Foreign Entity of Concern] uncertainty, and slow community storage development are expected to limit CCI growth below 1 GW by 2029,” said Allison Feeney, a research analyst at Wood Mackenzie. She added that residential storage will likely outpace solar thanks to strong incentives, especially in markets like California and Puerto Rico.
Allison Weis, Wood Mackenzie’s global head of storage, said Trump’s big bill act preserved the Investment Tax Credit (ITC) for batteries, but stricter sourcing rules after 2025 could reduce the five-year outlook by 16.5 GW.
“After 2025, utility-scale storage projects must comply with new, stringent battery sourcing requirements to receive the ITC,” Weis said. “While domestic supply is ramping up, shortages are possible, and developers may still rely on Chinese cells to fill gaps.”
The report warns that projects failing to hit certain milestones by the end of 2025 could face new permitting and regulatory risks, underscoring the urgency to build now under current rules.
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