What's Happening?
BloombergNEF has released a new projection indicating robust growth in the global energy storage market, with expectations of more than 92 GW / 247 GWh of energy storage additions worldwide in 2025, marking a 22.7% increase from 2024. Despite global trade
uncertainties and policy challenges in the United States and China, the forecast remains optimistic. Excluding pumped hydropower, the deployment is expected to reach 123 GW / 360 GWh in 2026, a 33% increase from 2025. Over the next decade, cumulative energy storage additions are projected to grow annually by 23%, reaching 2 TW / 7.3 TWh, a significant increase from 2024 levels. The U.S. energy storage sector faced uncertainty earlier in 2025 due to potential overhauls of federal energy tax credits and trade policies. However, President Trump’s administration preserved tax credits for energy storage installations and manufacturing, providing a clearer outlook for the industry.
Why It's Important?
The growth in the energy storage market is crucial for the U.S. clean energy sector, which has been navigating policy uncertainties. The preservation of tax credits for energy storage installations and manufacturing is expected to bolster the industry, supporting its expansion well into the 2030s. This development is significant as it helps untether energy storage from the fate of intermittent renewable resources, which have faced challenges under the Trump administration. The expansion of U.S. lithium-ion battery module manufacturing, despite dominance by Chinese firms in battery cells and materials, indicates a strengthening domestic market. Investments by foreign firms, particularly Korean companies, are expected to further boost U.S. manufacturing capacity, reflecting strong demand for energy storage solutions.
What's Next?
Energy storage developers are racing to begin construction on projects before 2026, when new restrictions on battery components tied to China are set to take effect. This urgency is driven by the need to adapt to policy changes and ensure continued growth in the sector. The U.S. market is poised for significant expansion, supported by utility and government-led procurement programs. These programs are expected to drive growth in larger countries across the Global South, including India, Vietnam, the Philippines, Mexico, and Brazil. The continued investment in U.S. energy storage manufacturing capacity, particularly by foreign firms, is likely to support further growth and meet the increasing demand for energy storage solutions.
Beyond the Headlines
The energy storage market's growth reflects broader trends in the global transition to clean energy. As countries seek to reduce reliance on fossil fuels, energy storage becomes a critical component in stabilizing renewable energy sources. The U.S. market's resilience amid policy challenges highlights the industry's adaptability and potential for innovation. The expansion of manufacturing capacity and investment by foreign firms underscores the interconnected nature of the global energy market, where international collaboration can drive progress in clean energy technologies.
