The US installed a record 3.3 GW/8.4 GWh of battery energy storage systems in the first quarter of 2026, according to the latest US Energy Storage Monitor report released by the American Clean Power Association (ACP) and Wood Mackenzie.

Deployment surpassed the previous first-quarter record by 54%, with the utility-scale, community, commercial and industrial, and residential segments all reaching new highs.

Utility-scale storage accounted for most of the activity, with more than 2.3 GW/6.8 GWh installed between January and March. Growth was partly driven by projects delayed from 2025, when developers focused on meeting tax incentive eligibility deadlines for projects in their pipelines.

Texas, California and Arizona continued to lead deployment, although markets with vertically integrated utilities also gained momentum, particularly Michigan and Georgia.

Commercial and industrial storage grows 193%

The community, commercial and industrial (CCI) segment installed 97.7 MW during the first quarter, representing a 27% increase from the previous quarter and a 193% rise year-over-year. California alone accounted for 75 MW of the total.

Further growth is expected in the community storage markets of Illinois, Maryland, Massachusetts and New York, which collectively have more than 215 MW in their project pipelines.

Meanwhile, the residential segment installed a record 1.3 GWh, up 86% year-over-year and 5% quarter-over-quarter. Deployment was supported by installations initiated at the end of 2025 to secure the expiring Section 25D tax credit.

California, Texas, Hawaii and Arizona recorded the largest quarterly increases in residential storage deployment. The national residential solar-plus-storage attachment rate also rose to 45%, compared with 38% in the first quarter of 2025.

“The industry is delivering on what the market needs—fast, flexible power that supports load growth, resource adequacy and a modern grid,” said John Hensley, senior vice president of Market and Policy Analysis at ACP.

US storage capacity expected to reach 200 GW by 2031

The US is projected to install 146 GW/499 GWh of new storage capacity between 2026 and 2031. This expansion would bring cumulative battery storage capacity to approximately 200 GW/655 GWh by the end of the period.

Utility-scale projects will remain the main driver, accounting for around 85% of installations expected between 2026 and 2031. Wood Mackenzie identified co-location and contracting with large electricity consumers as key sources of growth.

The CCI segment is also projected to grow steadily, expanding by 26% through 2031. However, residential installations could contract by 5% in 2026 due to constraints in tax equity availability and updated permitting rules.

Trade restrictions could create supply-chain bottlenecks

The report warned that restrictions involving foreign entities of concern (FEOC) could create development bottlenecks over the next two to four years. Key challenges include securing compliant equipment, eligible production capacity and battery components that meet US tax incentive requirements.

According to Wood Mackenzie, developers with mature pipelines and sufficient capital moved to protect projects from changing requirements in late 2025. These companies are now expected to seek long-term supply agreements with domestic manufacturers.

ACP said most of the country’s critical battery storage supply chain could be supplied domestically by the end of the decade, based on manufacturing facilities currently under construction and announced investments.