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U.S. Energy Storage Market Hits Record Q1 in 2025 with Over 2 GW Added Across Segments

Jun 28, 2025

The U.S. energy storage market recorded its highest-ever first-quarter performance in Q1 2025, adding over 2 GW of capacity across all segments, according to the U.S. Energy Storage Monitor by the American Clean Power Association and Wood Mackenzie. Utility-scale storage led the way with 1,558 MW installed—up 57% year-over-year (YoY)—while energy capacity reached 4,078 MWh, a 33% rise.

Residential storage saw the strongest growth, with capacity jumping 82% YoY to 458 MWh, driven mainly by California and Puerto Rico. The commercial, community, and industrial (CCI) segment added 26 MW, up 33% YoY. System cost reductions—utility-scale battery prices dropped 25% YoY to $874/kW—enhanced deployment economics.

California led installations with 457 MW, followed by Indiana, Arizona, Texas, and Nevada. The pipeline of utility-scale projects reached 603 GW.

Despite current momentum, policy uncertainty, tariff volatility, and the fate of the Investment Tax Credit (ITC) present challenges. Projections indicate 15.2 GW/48.7 GWh to be installed in 2025, with long-term cumulative capacity expected to hit 79.8 GW/289.4 GWh. The House reconciliation bill could significantly impact future growth, creating a 29.5 GW spread between high and low-case forecasts through 2029.