The US grid-scale battery storage market posted its strongest first quarter on record between January and March, with 9.7 GWh of new capacity installed, a year-on-year increase of 32%, according to a joint report from the Solar Energy Industries Association and research firm Benchmark Mineral Intelligence. Federal policy uncertainty, including permitting friction and trade restrictions under the Trump administration, has created headwinds for the sector, yet demand appears to be running hard enough to absorb them for the time being.
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"Energy storage is no longer just for backup, it's critical energy security infrastructure," said Shan Tomouk, lead battery storage analyst at Benchmark. The growth is driven in no small part by data centres, whose appetite for reliable, high-volume power is reshaping deployment patterns across the storage industry. Utility-scale projects still account for roughly 75% of the market, but behind-the-meter applications, data centres prominent among them, are projected to grow their share from 14% to 20% by 2030.
Several large technology companies have moved beyond lithium-ion into longer-duration technologies. Google has announced plans to deploy 30 GWh of iron-air batteries in Minnesota, while Meta has reserved up to 100 GWh of capacity using reversible solid oxide fuel cell technology from Noon Energy. Systems capable of more than 100 hours of discharge allow facilities to ride out multi-day renewable generation lulls without interruption.
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The storage-plus-gas combination is gaining ground, particularly among large AI operators. Elon Musk's xAI Colossus facility in Tennessee combines Tesla batteries with gas turbines, a configuration that reflects the fossil-fuel dependency underlying much of the current AI infrastructure build-out.
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Rules restricting involvement of foreign entities of concern, primarily Chinese suppliers, took effect in January for projects seeking tax credits, and the Treasury Department has yet to issue full compliance guidance. "Asset owners must track Chinese involvement in the supply chain, ownership, and financing of any storage project beginning construction in 2026 or later," said Allison Feeney, storage analyst at Wood Mackenzie. Many developers brought projects forward into 2025 to avoid the rules, which should keep the market from contracting through 2027.
Domestic manufacturing is expanding in parallel. Ford this month joined Tesla and General Motors in announcing plans to produce grid-scale storage systems at a Kentucky plant originally built for electric vehicle components. Residential storage, meanwhile, is moving in the opposite direction, declining 28% year-on-year in the first quarter following the phase-out of a key home-system tax credit. For now, the market belongs to the commercial and utility-scale end. (TF)
