According to the latest U.S. Energy Storage Monitor report released by the U.S. Clean Power Council (ACP) and Wood Mackenzie, the U.S. energy storage market set a new record for quarterly growth in the second quarter of 2025, with installed capacity reaching 5.6GW/15.78GWh.

The large-scale ground-mounted power station market performed exceptionally well, with installed capacity reaching 4.9GWh/14,950MWh in the second quarter, setting a new record. This installed capacity is sufficient to power 3.7 million American households during the average peak electricity demand period. Although early adopters still lead in deployment, nationwide activity demonstrates the clear demand for large-scale ground-mounted power station energy storage as a solution to rising electricity prices and surging energy demand.

Texas, California, and Arizona each added more than 1 GW of capacity, and markets like the Southwest Power Pool (SPP) saw renewed activity, with three projects coming online in Oklahoma – the first in the region in three years.

Forecasts for Florida and Georgia were revised significantly higher due to aggressive purchasing by vertically integrated utilities.

“As electricity demand surges, energy storage is being deployed rapidly to strengthen our grid and help lower energy prices for American homes and businesses,” said Noah Roberts, vice president of energy storage at the Clean Power Association. “Despite regulatory uncertainty, the drivers for energy storage remain strong, and the industry is making steady progress, anticipating that U.S. factory production will produce enough grid batteries to meet 100% of domestic demand. Energy storage is critical to the expansion of the U.S. grid and American energy production.”

The residential, community, commercial, and industrial energy storage markets continue to expand

In the second quarter, the residential energy storage market saw new installed capacity reach 608MW/752MWh, a year-on-year increase of 132% and a quarter-on-quarter increase of 8%.

• Growth was primarily driven by California, Arizona, and Illinois, where residential storage installation rates reached new highs and high-capacity systems also gained market share.

The community, commercial, and industrial (CCI) energy storage market expanded at a relatively small rate, with new installed capacity of 38MW/85MWh, an 11% year-on-year increase.

• In the second quarter, California and New York led CCI energy storage installations, accounting for more than 70% of total installed capacity, with Illinois also showing growth.

Due to high costs and policy restrictions, the scale of community energy storage deployment remains limited.

The policy environment is constantly changing, but the market remains resilient

The report indicates that, amidst an evolving policy environment, the US energy storage market will reach 87.8GW by 2029, driven by both residential and large-scale ground-mounted energy storage. However, due to uncertainty surrounding upcoming "Foreign Entities of Concern" (FEOC) regulations related to battery cell procurement, large-scale ground-mounted energy storage capacity in the US could decline by 10% year-over-year in 2027.

Allison Feeney, research analyst at Wood Mackenzie, said: “Price volatility, uncertainty around FEOC regulations, and slow development of community storage are expected to keep CCI market growth below 1GW by 2029, although Massachusetts’ SMART 3.0 policy could help drive future deployments. Residential storage is expected to grow faster than solar due to more resilient policies, high match rates in key markets such as California and Puerto Rico, and continued access to the Investment Tax Credit (ITC) through third-party ownership.”

Allison Weis, head of Wood Mackenzie’s global energy storage practice, said that while the One Big Beautiful Bill Act (OBBBA) retains the investment tax credit for energy storage, barriers remain and the five-year construction plan could be reduced by 16.5GW.

Weiss said: "After 2025, large-scale ground-mounted power station energy storage projects must meet new and strict battery procurement requirements to qualify for the investment tax credit policy. Although domestic battery cell supply is increasing, supply chain shortages may still occur, but developers are still considering importing from China to fill any gaps.

The near-term forecast is being boosted by a rush to build projects amidst greater near-term regulatory certainty. Projects face the risk of regulatory changes if they fail to meet certain milestones by the end of 2025. Additional downside risk exists if further permitting delays threaten solar and storage projects.

According to a previous report by Wood Mackenzie , the United States added 2.04GW/5.03GWh of new energy storage installed capacity in Q1 2025 , of which 1558MW/4078MWh were new utility-grade energy storage installed capacity, 26MW/63MWh were new industrial and commercial energy storage installed capacity, and 458MW/893MWh were new household energy storage installed capacity.