EU Installs Record 27.1 GWh Battery Storage Capacity in 2025, Driven by Utility-Scale Projects

The European Union installed 27.1 GWh of new battery energy storage capacity in 2025, marking its 12th consecutive record year and reflecting a 45% year-on-year growth, according to the EU Battery Storage Market Review 2025.

The latest additions have expanded Europe’s total battery fleet to 77.3 GWh, representing a tenfold increase since 2021, when installed capacity stood at just 7.8 GWh. However, to meet its energy system flexibility needs and fully support a renewable-based power system, the EU must replicate this growth trajectory and scale its battery fleet to approximately 750 GWh by 2030, the report said.

Utility-Scale Systems Drive Market Expansion

The study highlights a major structural shift in Europe’s battery storage market, with utility-scale battery energy storage systems (BESS) emerging as the dominant growth driver. Large-scale installations accounted for 55% of all newly added capacity in 2025, supported by improved market conditions, stronger policy frameworks, and increased investor confidence.

“Europe’s battery storage market is growing fast and delivering the flexible capacity our energy system urgently needs,” said Walburga Hemetsberger, CEO of SolarPower Europe. “The strong uptake of utility-scale batteries shows investors are ready, the technology is mature, and the system benefits are clear. However, deployment must now accelerate significantly to support Europe’s energy security and competitiveness.”

Residential Storage Declines Amid Policy and Price Shifts

In contrast, behind-the-meter battery storage showed mixed trends. Residential installations declined by 6% year-on-year to 9.8 GWh, marking the second consecutive annual fall. The slowdown was attributed to lower electricity prices and reduced government support schemes, which weakened household investment incentives.

Meanwhile, commercial and industrial (C&I) battery systems recorded modest growth but continue to represent a relatively small share of total installations.

Manufacturing Capacity Expands but Structural Gaps Persist

On the supply side, the report noted significant progress in EU battery manufacturing, with 252 GWh of nominal battery cell production capacity in place in 2025. Europe has built a strong midstream industrial base, particularly in electrolyte and separator manufacturing.

However, structural vulnerabilities remain. Cathode and anode active material production remains limited, while over 90% of existing battery cell capacity is dedicated to electric vehicle applications, restricting availability for stationary energy storage. High production costs and project delays further challenge competitiveness, underscoring the need for a more resilient and fully integrated European battery value chain.

Policy Priorities to Scale Battery Storage

To achieve the required market scale, SolarPower Europe outlined three priority action areas for policymakers:

-Accelerate deployment of battery energy storage systems by streamlining permitting processes, prioritising grid-ready projects, and removing tariff barriers to enable full market participation.

-Strengthen and diversify battery supply chains through targeted manufacturing support, improved access to critical raw materials, expanded recycling capacity, and strategic international partnerships.

-Enhance safety, sustainability, and quality standards by harmonising EU-wide safety regulations, strengthening recycling and second-life battery frameworks, and implementing transparent carbon footprint reporting.

Market Momentum Gathers Pace

Antonio Arruebo, Lead Author of the report and Market Analyst at SolarPower Europe, said the 2025 data signals renewed momentum in Europe’s battery market, particularly in the utility-scale segment, while cautioning that policy clarity remains essential for distributed storage growth.

“Large-scale battery deployment is accelerating, but the decline in residential installations shows that clearer policy support is still required to unlock wider investments. Batteries remain critical to integrating renewable energy, stabilising the grid, and delivering Europe’s energy transition,” Arruebo said.