The United States deployed a record 3.3 GW/8.4 GWh of battery energy storage systems (BESS) during the first quarter of 2026, marking a 54% increase over the previous first-quarter record, according to the latest U.S. Energy Storage Monitor released by the American Clean Power Association (ACP) and Wood Mackenzie.
The record-breaking performance was driven by strong installations across the utility-scale, commercial and industrial (C&I), and residential sectors, highlighting the growing role of battery storage in supporting grid reliability, renewable energy integration, and rising electricity demand.
Utility-scale projects accounted for the largest share of deployments, with more than 2.3 GW/6.8 GWh installed during the quarter. The surge was largely attributed to projects delayed from 2025, as developers prioritized meeting tax incentive eligibility requirements for projects scheduled for completion in the second half of last year.
Texas, California, and Arizona remained the leading utility-scale storage markets, while emerging markets such as Michigan and Georgia also recorded increased activity, supported by investments from vertically integrated utilities.
The Community, Commercial and Industrial (CCI) segment recorded 97.7 MW of new installations in the first quarter, representing a 27% increase from the previous quarter and a 193% year-on-year rise, making it the strongest first quarter on record for the sector. California contributed 75 MW of the total installed capacity, while additional growth is expected in Illinois, Maryland, Massachusetts, and New York, where more than 215 MW of community storage projects are currently in the development pipeline.
The residential energy storage market also achieved a record quarter, with 1.3 GWh of installations, reflecting an 86% year-on-year increase and a 5% sequential rise. The growth was supported by homeowners accelerating installations initiated in late 2025 to qualify for the expiring Section 25D federal tax credit. California, Texas, Hawaii, and Arizona recorded the highest quarterly increases in residential storage deployments.
John Hensley, Senior Vice President of Market and Policy Analysis at ACP, said the industry’s continued growth demonstrates the increasing value of battery storage in delivering flexible and reliable power to support expanding electricity demand and modernize the grid.
Looking ahead, the report projects the U.S. energy storage market will nearly quadruple over the next six years, reaching approximately 200 GW/655 GWh of cumulative installed storage capacity by 2031. Between 2026 and 2031, the country is expected to install an additional 146 GW/499 GWh of storage capacity, with the utility-scale segment accounting for approximately 85% of total deployments.
According to Wood Mackenzie, co-located renewable energy projects and long-term contracts with large electricity consumers are expected to remain key drivers of future market growth. While utility-scale storage is forecast to experience the fastest expansion, the CCI segment is projected to grow steadily at around 26% through 2031. In contrast, the residential market is expected to contract by approximately 5% in 2026, primarily due to limited tax equity availability and updated permitting requirements.
The report also highlighted potential challenges facing the sector following the implementation of Foreign Entity of Concern (FEOC) restrictions. Developers are expected to face increasing pressure to secure FEOC-compliant battery equipment and domestic supply chains while maintaining eligibility for federal manufacturing incentives under the Section 45X tax credit.
Wood Mackenzie noted that larger developers with established project pipelines have already moved to secure compliant supply agreements, while smaller developers may face consolidation or increased reliance on lower-cost overseas equipment manufacturers. At the same time, domestic battery manufacturers are expected to compete for limited compliant components as the U.S. accelerates efforts to localize battery production.
Despite these challenges, ACP stated that continued investment in domestic manufacturing and supportive trade policies could enable most critical battery storage supply chain components to be produced within the United States before the end of the decade, based on facilities currently under construction and announced investments.
The report also noted that the national residential solar-plus-storage attachment rate increased to 45% in the first quarter of 2026, compared with 38% during the same period in 2025, reflecting growing consumer demand for integrated solar and battery energy systems.
