The U.S. energy storage market is on a meteoric rise. Last year saw energy storage deployments set a new record with 12.3 GW of installations across all segments, according to the latest U.S. Energy Storage Monitor report released by the American Clean Power Association (ACP) and Wood Mackenzie.
The report shows a total of 12,314 MW and 37,143 MWh deployed, representing increases of 33% and 34% respectively over 2023 numbers.
“After another year of record deployment, energy storage is solidifying its place as a leading solution for strengthening American energy security and grid reliability in a time of historic rising demand for electricity,” said Noah Roberts, VP of energy storage for ACP. “The energy storage industry has quickly scaled to meet the moment and deliver reliability and cost-savings for American communities, serving a critical role firming and balancing low-cost renewables and enhancing the efficiency of thermal power plants.”
Record growth for grid-scale storage
Gride-scale energy storage deployments have been especially robust, according to the report. While Q4 grid-scale energy storage deployments were down 20% compared to Q4 2023, this was primarily due to the delay of 2 GW of projects in late-stage development from Q4 2024 to 2025.
Texas and California continue to lead the market, with 61% of the total installed capacity in Q4, while the remaining 39% was installed across 13 states, expanding storage deployment beyond the leading markets. Grid-scale storage installations are forecasted to reach 13.3 GW in 2025.
“Energy storage has entered a new phase of growth with its first year of double-digit deployment. We are increasingly seeing the industry’s growth diversified across geographic regions, with 30% of storage capacity additions in Q4 2024 represented by New Mexico, Oregon, and Arizona,” said Kelsey Hallahan, senior director of market intelligence for ACP. “With a robust pipeline, and forecasted sustained growth, the industry is on a path to surpass 100 GW of grid-scale storage deployed by 2030.”
Strong year for residential, CCI sectors
The residential storage market exceeded 1,250 MW in 2024, marking its highest year on record and 57% above 2023 totals. A record-breaking 380 MW of residential storage was installed in Q4 2024, a 6% increase over the previous quarter.
In addition, 145 MW of community-scale, commercial and industrial (CCI) storage was installed in 2024, a 22% increase over the previous year. California, Massachusetts, and New York accounted for 88% of installed CCI capacity.
Continued growth forecasted for 2025
Forecasted installations for 2025 have increased 7% over last quarter’s forecast. Across all segments, 15 GW of storage is expected to be installed this year, marking a 25% increase over 2024.
“Activity has been strong and our forecast for this year has expanded,” said Allison Feeney, research analyst at Wood Mackenzie. “However, due to policy uncertainties, growth will likely slow down this year and in subsequent years. Growth will pick back up toward the end of the decade, with a projected 81 GW total installations from 2025 to 2029.”
Uncertainties surrounding the continuation of current tax incentives and the implementation of tariffs could change the long-term outlook, according to Allison Weis, global head of storage for Wood Mackenzie.
“It’s still too early to determine the final form of IRA tax incentives over the coming year,” Weis said. “The combination of new tariffs on China and other countries with continued 45x and domestic content bonus adder incentives would make US-based systems more competitively priced. However, many domestic providers are not set up to meet quick demand. If higher pricing is combined with ITC tax incentives phasing out beginning in 2028, it could lower our five-year deployment outlook by as much as 19%.”
Tags: BESS, energy storage, utility-scale
