Record Q1 2026 US Energy Storage Installations Amid Positive Forecast

An Era of Expansion: US Energy Storage Sector Set for Significant Growth

The United States recorded an addition of 3.3 GW/8.4 GWh of energy storage in Q1 2026, hinting at an encouraging future for the sector. The report, as per data by Wood Mackenzie and the American Clean Power Association (ACP), indicates record levels for utility-scale, residential, and commercial/community/industrial segments in the traditionally slow first quarter.

Forecast: A Flourishing Future

Projections by the London-based energy consultancy and the ACP suggest that cumulative installed US energy storage capacity could reach 200 GW/655 GWh by 2031, quadrupling from present levels. The forecast aligns with an independent outlook by the US Energy Information Administration, which predicts a twofold rise in US energy storage capacity by the end of 2027.

Key Influences and Expectations

The Q1 2026 U.S. Energy Storage Monitor by Wood Mackenzie/ACP anticipates an increase in installation volumes over the coming years, helped by favorable tax policies and robust demand for colocated and behind-the-meter storage. This growth is expected to occur in parallel with an expansion in US battery manufacturing capacity.

Industry Insights

Both the Q1 2026 U.S. Energy Storage Monitor and the EIA’s June 2026 Short-Term Energy Outlook suggest promising short to medium-term prospects for the US battery energy storage sector. Increasing sales to commercial, industrial, and transportation users are projected to boost US electricity consumption by 76 billion kWh in 2026 and 126 billion kWh in 2027, according to the EIA.

In 2026, above-average summer temperatures across much of the US are set to spur electricity demand, a surge that renewables are expected to satisfy almost entirely. Solar power generation could rise by 19%, and wind generation by 10%, within the year.

Simultaneous solar and battery deployments continue to dominate new generation deployments in the US, accounting for 91% of nameplate generating capacity added in Q1 2026. Nearly 50% of new residential solar systems were paired with batteries during the same period, as indicated by a report from the U.S. Solar Energy Industries Association.

Factors Fuelling Growth

According to Wood Mackenzie and ACP, the US battery boom is largely driven by the preservation of the federal investment tax credit for qualifying energy storage systems. These credits, initially authorized by the Inflation Reduction Act in 2022, can offset 30% or more of deployment costs. The One Big Beautiful Bill Act preserved the energy storage ITC last year, even though it sped up the expiration of corresponding investment and production tax credits for wind and solar systems.

Future Trends

WoodMac/ACP projects that utility-scale storage will make up 85% of capacity additions through to 2031 as large-load customers sign colocation and capacity contracts with energy storage providers. The commercial/community/industrial segment is set to grow 26% through 2031, spurred by strong behind-the-meter demand in California and at least 215 MW of community-scale storage projects in the pipeline nationally. However, the residential storage segment is expected to expand at a 12% average annual pace over the next four years, following a slight contraction in 2026 due to a rush of installations ahead of the expiration of the Section 25D tax credit at the end of last year.

Domestic Manufacturing on the Rise

Changes in tax-code that favor energy storage systems with more US-sourced content have prompted domestic battery manufacturing to ramp up in anticipation of projected demand. The Energy Storage Coalition noted in March that US factories now have the capacity to supply 100% of domestic demand. Several manufacturers who initially planned to produce electric vehicle batteries in the US, such as Ford and General Motors, have already announced significant energy storage investments this year.