U.S. Energy Storage Market Hits Record 5.6 GW in Q2 2025, Driven by Utility-Scale Growth

The U.S. energy storage sector posted its strongest quarter ever in Q2 2025, adding 5.6 gigawatts (GW) of new capacity, according to the latest U.S. Energy Storage Monitor report from the American Clean Power Association (ACP) and Wood Mackenzie.

Utility-scale projects dominated growth, contributing 4.9 GW—enough to power 3.7 million American homes during average peak demand. Deployment is spreading nationwide, underscoring the role of large-scale storage in addressing rising power demand and higher electricity prices.

The residential segment installed 608 megawatts (MW), marking a 132 percent increase year-over-year and an 8 percent rise over Q1. California, Arizona, and Illinois were key drivers, with growing adoption of higher-capacity home systems.

Community, commercial, and industrial (CCI) storage reached 38 MW, an 11 percent year-over-year gain. California and New York led installations, while Illinois also gained ground. However, community-scale deployment remains constrained by high costs and policy hurdles.

Regionally, Texas, California, and Arizona each added over 1 GW. The Southwest Power Pool (SPP) market also revived, with Oklahoma’s first projects in three years coming online. Meanwhile, Florida and Georgia received major forecast upgrades due to new utility procurements. “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, ACP Vice President of Energy Storage. “Despite regulatory uncertainty, the drivers for energy storage are strong and the industry is on track to produce enough grid batteries in American factories to supply 100% of domestic demand. Energy storage will be essential to the expansion of the U.S. power grid and American energy production.” 

“Pricing and FEOC uncertainty, and slow community storage development are expected to limit CCI segment growth below 1 GW by 2029, though Massachusetts’ SMART 3.0 may help boost future deployment,” said Allison Feeney, research analyst at Wood Mackenzie. “Residential storage is expected to outpace solar due to stronger policy resilience, high attachment rates in key markets like California and Puerto Rico, and continued ITC access through third-party ownership.”