The U.S. energy storage sector recorded its strongest quarter on record in Q2 2025, adding 5.6 gigawatts (GW) of new capacity, according to the latest U.S. Energy Storage Monitor from the American Clean Power Association (ACP) and Wood Mackenzie.
Utility-scale installations drove nearly 90% of growth, underscoring how large-scale storage is rapidly becoming a structural element of the national grid as electricity demand, volatility, and prices rise across markets.
The quarter’s 4.9 GW of utility-scale additions—enough to power 3.7 million American homes during peak hours—reflect a growing trend of grid operators and utilities turning to storage as a balancing mechanism rather than a supplementary technology. Texas, California, and Arizona each added over 1 GW, while new activity in the Southwest Power Pool (SPP) market—particularly Oklahoma’s first projects in three years—signaled regional diversification beyond traditional strongholds.
According to ACP’s Vice President of Energy Storage, Noah Roberts, deployment momentum continues despite “regulatory uncertainty” and supply-chain headwinds. He emphasized that domestic battery production capacity is now positioned to meet 100% of U.S. grid-scale demand, reflecting rapid expansion of manufacturing investments incentivized by the Inflation Reduction Act (IRA).
Yet the outlook remains uneven across segments. Residential storage reached 608 MW, up 132% year-over-year, driven by state-level policy design and rising energy costs that make home storage more economically attractive. California, Arizona, and Illinois led adoption, aided by evolving rate structures and utility programs that favor self-consumption and resiliency. Analysts expect residential growth to remain strong, with Wood Mackenzie forecasting it to outpace solar over the medium term due to “policy resilience” and continued access to investment tax credits (ITC) through third-party ownership models.
In contrast, the community, commercial, and industrial (CCI) sector added just 38 MW, reflecting persistent structural barriers. Although California and New York continue to dominate installations, deployment is slowed by high upfront costs, permitting complexity, and limited participation in wholesale markets. Wood Mackenzie’s Allison Feeney projects the CCI segment will remain below 1 GW through 2029, with growth constrained by “pricing and Foreign Entity of Concern (FEOC) uncertainty.” However, she noted that Massachusetts’ upcoming SMART 3.0 policy could catalyze a new wave of mid-scale projects by improving revenue stability and incentive alignment.
Utility procurement remains a critical driver in emerging markets. Both Florida and Georgia received upward forecast revisions following new utility-scale solicitations that integrate storage into renewable expansion plans. The geographic broadening of deployments is particularly notable: while California’s dominance persists, rising installations in the Midwest and Southeast signal that grid-scale storage is shifting from pilot-scale adoption to regional energy infrastructure planning.
The Q2 2025 record suggests that the storage industry’s structural fundamentals remain strong, even as economic and regulatory friction complicates the investment environment.
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