Despite policy shifts, battery storage expected to grow in 2026

Despite some headwinds like tariffs and shifting U.S. policy around renewable energy, U.S. battery storage is expected to grow 21% in 2026.

That’s one estimate from a new report by Benchmark Mineral Intelligence and the Solar Energy Industries Association. Demand for energy storage is increasing as electricity demand grows rapidly in the U.S.

For the lights to stay on, electricity supply and demand must always be balanced. But today, maintaining that balance comes with challenges, said Mark Dyson, managing director at the energy nonprofit RMI.

“The demand for electricity is growing overall, driven by the growth of data centers,” Dyson said. “We're also seeing aging grid infrastructure have increasing impacts, and electricity prices are rising across the board.” 

Dyson said batteries are uniquely suited to address these problems. 

“I like to think of them as a Swiss army knife,” he said.

For one, when paired with solar, it’s a rapid and cost-effective way to generate new electricity, said Geoff Hebertson, lead renewables analyst with Rystad Energy. 

“We have seen a lot of cases, especially when you get to scale, that a solar plus storage will still be the cheapest form of electricity,” Hebertson said.

Tariffs did throw a wrench in that, since a lot of batteries come from China. But John Murray, principal analyst at S&P Global Energy, said that supply chain is evolving. 

“We kind of saw a change in thinking, especially among some of the South Korean manufacturers in the U.S., where they're making a pivot from EV batteries to utility scale energy storage,” Murray said.

And while policies are less favorable to solar development today — which goes hand in hand with batteries — Stephanie Bosh, senior vice president of communications at the Solar Energy Industries Association, is bullish on battery storage. 

“The economics of storage are going to continue to drive growth,” Bosh said.

Those economics are driven from a pretty basic principle — buy low and sell high, said Dan Kaffine, energy economics professor at the University of Colorado, Boulder.

“They're going to charge the battery when prices are low and they're going to sell that power when prices are high,” Kaffine said.

Arbitrage keeps batteries viable. Often, that means charging the battery when there’s tons of sun shining, and selling back to the grid as the sun goes down.