The rapid expansion of battery storage marks a milestone in Europe’s energy transition. Since 2021, the continent’s installed battery capacity has grown tenfold, rising from 7.8 GWh to 77.3 GWh today. To keep pace with future energy flexibility needs, the EU will need to achieve a similar leap, scaling up to around 750 GWh by the end of the decade.
SolarPower Europe’s EU Battery Storage Market Review 2025 highlights that utility-scale systems have become the main driver of Europe’s battery storage growth, representing 55 percent of all new capacity added in 2025 and signalling a clear shift in market structure. Improved market conditions and more effective policy frameworks have enabled large-scale projects to reach record levels.
December Battery Index – premium prices drop sharply
While behind-the-meter storage continues to play a vital role, residential battery installations declined for the second year in a row, falling by 6 percent to 9.8 GWh, largely due to lower electricity prices and reduced support schemes. Commercial and industrial battery systems grew modestly but remain a smaller segment of the market.
The report also examines the state of EU battery manufacturing, noting that Europe has developed a solid midstream industrial base, with 252 GWh of nominal battery cell production capacity in 2025, but still faces significant structural gaps. While the EU demonstrates strong capabilities in electrolyte and separator production, cathode and anode active material manufacturing remains limited, and over 90 percent of current cell capacity is geared towards electric vehicles rather than stationary storage. Project postponements and relatively high production costs continue to challenge competitiveness, underscoring the need for a more resilient and fully integrated European battery value chain.
Why trading – not ancillaries – is crucial for BESS profitability
The report sets out three priority areas for EU action to scale battery storage effectively:
Accelerate deployment of BESS
o Simplify and speed up permitting for storage and hybrid projects
o Prioritise mature, grid-friendly projects in connection queues
o Address tariff barriers and enable fair access to all power markets
Build affordable and resilient supply chains
o Support EU battery manufacturing through targeted investment and innovation
o Strengthen access to critical raw materials and scale up recycling capacity
o Develop strategic global partnerships to diversify supply
Strengthen quality, safety and sustainability
o Harmonise EU-wide safety standards and incident reporting
o Improve rules for recycling and second-life batteries
o Implement robust carbon footprint disclosure across the battery value chain
“This year’s data shows that the EU storage market is picking up speed again, particularly in large-scale systems. At the same time, the decline in distributed batteries reminds us that we still need clearer policy support to unlock more investments for businesses and households,” said Antonio Arruebo, lead author of the report and market analyst at SolarPower Europe. (hcn)
