The U.S. energy storage market posted its strongest quarter on record in Q2 2025, with 5.6 gigawatts (GW) of new installations, according to the U.S. Energy Storage Monitor report released by the American Clean Power Association (ACP) and Wood Mackenzie.
Utility-scale projects dominated growth, adding 4.9 GW—enough to power 3.7 million homes during peak demand. Texas, California, and Arizona each added over 1 GW, while Oklahoma saw its first projects in three years under the Southwest Power Pool. Florida and Georgia also registered forecast upgrades due to major procurements by vertically integrated 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, Vice President of Energy Storage at ACP.
The residential storage market expanded by 608 megawatts (MW), up 132% year-over-year and 8% from Q1. California, Arizona, and Illinois led installations as higher-capacity systems gained traction. Community, commercial, and industrial (CCI) storage added 38 MW, led by California and New York.
Despite ongoing policy and regulatory uncertainties, total U.S. storage capacity is projected to reach 87.8 GW by 2029. However, utility-scale installations may dip by 10% in 2027 amid concerns over Foreign Entity of Concern (FEOC) rules on battery sourcing.
“Residential storage is expected to outpace solar due to stronger policy resilience and high attachment rates in markets like California and Puerto Rico,” said Allison Feeney, Research Analyst at Wood Mackenzie.
Allison Weis, Global Head of Storage at Wood Mackenzie, added that while the Investment Tax Credit was preserved under the One Big Beautiful Bill Act, stricter sourcing rules post-2025 could tighten supply chains. Developers may accelerate project starts ahead of regulatory changes to avoid exposure to new requirements.
