The utility-scale energy storage market is at risk of plunging 29 percent next year because of “policy uncertainty” from tariffs and potential rollbacks of key tax credits in Congress, according to a new report.
The analysis from Wood Mackenzie and the American Clean Power Association found that energy storage — which is dominated by lithium-ion batteries — experienced record growth in the first quarter of 2025, adding 2 gigawatts. Utility-scale battery installations alone increased 57 percent in comparison to the same quarter last year.
But federal policy could cause a sharp reversal in 2026, with implications for renewables tied to batteries and grid stability in regions with surging power demand. Among the threats is the end of some Biden-era clean energy tax credits, as outlined in the House and Senate versions of President Donald Trump’s “big, beautiful bill.”
The industry’s quarterly results “demonstrate the demand for energy storage in the US to serve a grid with both growing renewables and growing load. However, the industry stands at a crossroads, with potential policy changes threatening to disrupt this momentum,” Allison Weis, global head of energy storage at Wood Mackenzie, said in a statement.
