According to data released by the US Energy Information Administration (EIA) in January 2025, utility-scale battery energy storage capacity in the United States grew 66% in 2024, exceeding a cumulative total of 26 gigawatts (GW). This growth rate marks the entry of the US energy storage industry into a new phase of explosive development, with 10.4 GW of new storage capacity added in 2024, making it the second-largest source of new generating capacity after solar.
Analysis of EIA data by the SUN DAY Campaign further confirms this trend. During the 12-month period from September 1, 2024, to August 31, 2025, utility-scale solar capacity grew by 31,706.5 megawatts (MW), small-scale solar added 5,718.1 MW, while battery storage grew 63.9% over the past year, adding 13,377.5 MW of new capacity.
Storage and Solar Dominate 2025 New Capacity Additions
The EIA predicts 2025 will be a record-breaking year for storage capacity growth, with an estimated 18.2 GW of utility-scale battery storage expected to connect to the grid. Solar and storage combined will account for 81% of new US generating capacity additions in 2025, with solar comprising over 50%, projected to add 32.5 GW.
In 2024, power providers added a record 30 GW of utility-scale solar, accounting for 61% of capacity additions that year. Texas (11.6 GW) and California (2.9 GW) will account for nearly half of new utility-scale solar capacity additions in 2025.
In contrast, traditional energy new installations appear minimal. Developers plan to build 4.4 GW of new natural gas-fired capacity in 2025, with 50% coming from simple-cycle combustion turbines and 36% from combined-cycle units.
Texas Surpasses California as Largest Storage Market
In terms of regional distribution, Texas and California continue to dominate the US energy storage market. In the second quarter of 2025, the Electric Reliability Council of Texas (ERCOT) added 3.213 GW of storage capacity, accounting for 51.5% of the quarter’s national additions, thereby surpassing the California Independent System Operator (CAISO) to become the region with the largest energy storage capacity in the United States.
As of the end of the second quarter of 2025, total US battery storage capacity reached 38.126 GW, up 63% year-over-year and 20% quarter-over-quarter. ERCOT’s total storage capacity reached 14.173 GW, accounting for 37% of the national total; CAISO had 12.419 GW, representing 33%; and the Western Electricity Coordinating Council (WECC) region had 8.063 GW, accounting for 21%.
At the state level, Texas leads the nation with approximately 14.173 GW, followed by California with 13.066 GW, Arizona with 3.853 GW, Nevada with 1.604 GW, and New Mexico with 701 MW.
Renewable Energy Dominates, Fossil Fuels Continue Decline
Over the past year, renewable energy capacity including storage and small-scale solar grew by 56,019.7 MW, while combined fossil fuel and nuclear capacity declined by 1,095.2 MW. This data clearly demonstrates the structural transformation underway in the US power industry.
Looking ahead to the next 12 months, utility-scale renewables and storage are projected to increase by 67,806.1 MW, while natural gas will see limited growth of only 3,835.8 MW, coal and oil capacity will continue to contract, and no new nuclear capacity is forecast.
In September 2024, utility-scale solar generation increased 36.1% year-over-year, while small-scale solar grew 12.7%. Combined, they provided 9.7% of national electricity that month, up from 7.6% a year earlier.
In the first nine months of 2025, total solar generation grew 29%, providing slightly more than 9% of US electricity. Wind and solar combined contributed 18.8% of total US electricity generation during January-September 2025, a significant increase from 17.1% in the same period of 2024.
Policy Impact Limited, Market Forces Drive Transition
Ken Bossong, executive director of the SUN DAY Campaign, stated: “The Trump Administration’s efforts to jump-start nuclear power and fossil fuels are not succeeding. Capacity additions by solar, wind, and battery storage continue to dramatically outpace gas, coal, and nuclear… and by growing margins.”
Bossong noted: “The Trump Administration and its Republican supporters in Congress may slow renewable energy growth a bit. However, EIA’s data reinforce the conclusion that the transition to solar, wind, other renewables and storage continues, is accelerating, and has become inevitable.”
According to Federal Energy Regulatory Commission (FERC) data from February 2025, solar and wind accounted for almost 98% of new US electrical generating capacity added in the first two months of 2025. In January and February, renewables (6,309 MW) comprised 97.6% of new capacity, while natural gas (147 MW) provided just 2.3%.
Storage Technology Development and Economic Viability Improvement
According to EIA data, as of November 2024, US large-scale storage project applications reached 56GW, up 81% year-over-year; US solar project applications reached 108GW, up 20.6% year-over-year. Wood Mackenzie predicts the US storage market across all segments will reach 15GW/48GWh in 2025, a 7% increase from the previous quarter’s forecast.
According to forecasts from multiple institutions, US storage installations grew from 0.29GW/0.65GWh in 2017 to 8.74GW/25.98GWh in 2023, an approximately 30/39-fold increase in just six years.
The continued decline in energy storage system costs is one of the key factors driving market growth. Despite challenges from tariffs and supply chains, GridBeyond’s second quarter 2025 report indicates that advanced integrated bidding solutions can boost storage revenues by 40% to 50% compared to more standard or basic approaches.
Dual Demands of Grid Reliability and Energy Transition
Energy storage systems play an increasingly important role in the US grid. The importance of battery storage when used in conjunction with renewable energy is highlighted, helping to balance supply and demand and improve grid stability.
In California, electricity prices typically drop at midday due to excess solar power, then surge in the evening when solar generation wanes, leading to market dispatch of gas plants, hydroelectric dams/pumped storage, and more recently, batteries.
Stacey Gutierrez, analyst at S&P Global Commodity Insights, stated: “In California, the ancillary service market has essentially become saturated, and most Battery Energy Storage Systems have moved to energy arbitrage. In ERCOT, most BESS projects are still able to profit in the ancillary service market.”
Future Outlook and Challenges
Despite policy uncertainties, storage system deployments are expected to be even higher in 2025. By the end of 2030, the US will deploy nearly 12GW of residential storage systems. By 2029, the US commercial and industrial storage market is expected to triple in size, though this depends largely on federal and state government policies.
However, the industry also faces some challenges. Allison Weis, global head of energy storage at Wood Mackenzie, noted: “New tariffs imposed on China and other countries, combined with ongoing 45X tax credit rates and domestic manufacturing incentive measures, will make US domestically manufactured storage systems more price competitive. However, many US domestic suppliers are not prepared to meet the rapid demand.”
Overall, the explosive growth of the US energy storage market marks the entry of energy transition into a new phase. Driven by market forces and technological progress, storage and renewable energy are reshaping the landscape of the US power system, while the era of fossil fuels is gradually coming to an end.
