Battery storage grows despite policy shifts and supply challenges
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Rocky Mountain Institute (RMI) reported that energy storage systems are growing at a rate of 30% annually, driven by decreasing energy costs and benefits for local communities.
In 2024, batteries supplied 13% to 19% of electricity during peak demand on California’s grid, saving over $29 million in energy costs. The Electric Reliability Council of Texas (ERCOT) also saw batteries supply 6% to 9% of power during peak hours the same year.
However, a rule change in December 2025 increased wholesale pricing in ERCOT by $3.6 million over a single day, demonstrating how regulations can affect battery performance. While forecasts initially predicted continued strong growth due to the Inflation Reduction Act, Wood Mackenzie now anticipates utility-scale battery deployment will be flat in 2026 and grow only 8% through 2031, citing challenges like import tariffs and restrictions on foreign-produced components. RMI’s analysis also showed that batteries offer financial benefits to communities.
A review of projects in California, Massachusetts, Nevada, and Texas found average annual tax contributions of $6,600 per megawatt of battery capacity. For example, a 250 MW facility in Medway, Massachusetts, is expected to generate $46 million in revenue for the town over 20 years. Additionally, replacing gas-fired power plants with batteries could reduce health costs. Suffolk County, New York, could save $5.3 million annually by switching its Port Jefferson plant to battery storage.
