The global energy storage market is set to achieve significant growth in 2026 and 2027, driven by rising renewable energy capacity, increasing electricity demand, supportive government policies, and the growing need for grid stability. According to a forecast by BloombergNEF, annual energy storage installations are expected to reach new records as the technology expands across established and emerging markets worldwide.
Global energy storage installations are projected to increase by 45% in power capacity terms in 2026, with annual additions reaching 188 gigawatts (GW) or 535 gigawatt-hours (GWh). The expansion is expected to continue in 2027, when annual additions are forecast to exceed 209 GW. The growth reflects the increasing importance of batteries in managing electricity supply, integrating renewable power, and supporting the changing requirements of modern power systems.
Several factors are contributing to the expansion of the market. The rising share of solar energy in electricity generation has increased the need for storage systems that can absorb excess power during periods of high production and release it when demand rises. Governments are also introducing policies that encourage or require renewable energy projects to include storage capacity. Tax incentives, declining battery costs, and increasing electricity consumption from data centres are further supporting investment in energy storage infrastructure.
China, the United States, and Australia continue to represent the largest markets for energy storage installations, accounting for more than 60% of global deployments. However, the market is gradually expanding beyond these established regions. India is emerging as an important growth market, supported by tender-driven procurement and large-scale projects that combine renewable energy generation with battery storage. Several countries in Europe, the Middle East, Latin America, and Southeast Asia are also increasing investments in storage to improve grid flexibility and manage fluctuations in renewable electricity generation.
Lithium iron phosphate (LFP) batteries continue to dominate the energy storage sector because of their competitive costs, established manufacturing capacity, and developed supply chains. Their growing adoption has supported the deployment of utility-scale battery energy storage systems across multiple markets. At the same time, sodium-ion batteries are attracting attention as an alternative technology. These batteries can offer advantages such as reduced reliance on certain critical minerals, lower fire risks in some designs, and wider operating temperature ranges. However, limited manufacturing scale and cost challenges remain barriers to wider commercial adoption.
Global supply chains are also undergoing changes as countries seek to strengthen domestic manufacturing and reduce dependence on overseas suppliers. The United States, the European Union, and Japan are pursuing localization policies, domestic incentives, and measures addressing supply-chain security. These developments are influencing investment decisions and international equipment trade. Chinese manufacturers are increasingly exploring opportunities in markets across the Middle East, Africa, and Latin America, where demand for energy storage is expanding.
The integration of batteries with renewable energy projects is becoming another major market driver. Increasing solar generation can lead to electricity curtailment and lower market prices during periods of abundant supply. Co-located storage systems can capture surplus electricity and deliver it when generation declines or demand increases, improving the utilization and commercial value of renewable power plants.
As storage procurement expands and governments introduce new requirements for renewable energy projects, energy storage is becoming an increasingly important component of electricity infrastructure. Continued investment, technological development, and supportive policies are expected to shape the market’s growth over the coming decade, strengthening the role of storage in the global energy transition.
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