The United States energy storage sector installed 9.7 gigawatt-hours (GWh) of new capacity in the first quarter of 2026, marking the strongest first-quarter performance on record, according to a new report published by the Solar Energy Industries Association and Benchmark Mineral Intelligence.

The findings are published in the US Energy Storage Market Outlook Q2 2026 (ESMO), which highlights that installations grew 32% year-on-year, despite policy headwinds in Washington affecting clean energy deployment timelines.

Record quarter driven by grid demand and data centers

Of the total installed capacity, 7.8 GWh corresponded to utility-scale systems, while 648 megawatt-hours (MWh) came from commercial and industrial installations, and 515 MWh from residential storage.

The report notes that growing electricity demand—particularly from data centers operated by companies such as Google and Meta—has become a key driver of storage deployment. These companies have signed agreements for tens of thousands of megawatt-hours of storage capacity so far this year.

According to SEIA, the rapid expansion of storage systems is helping balance rising electricity demand while improving grid reliability and keeping costs under control.

Outlook revised upward to 2030

The report also revises upward the long-term outlook for the sector, projecting that more than 610 GWh of energy storage capacity will be installed by 2030, reflecting stronger-than-expected demand and investment momentum.

SEIA attributes this outlook revision to increased investor and developer interest, as well as to volatility in global energy markets linked to disruptions in gas and turbine supply chains. In this context, solar and storage technologies are gaining competitiveness due to their independence from fuel price fluctuations and increasing domestic manufacturing capacity in the US.

Energy security and geopolitical context

The report links part of the accelerating demand to broader energy security concerns, including disruptions in global gas markets and geopolitical tensions, including the war in Iran, which is contributing to renewed focus on energy independence.

“Energy storage is immune to fuel price volatility, lowers electricity costs and strengthens grid reliability,” said Darren Van’t Hof, interim president and CEO of SEIA, in statements included in the report. He added that delays in permitting processes in Washington could slow down deployment and increase electricity costs for consumers.

Role of AI and infrastructure expansion

SEIA highlights that artificial intelligence infrastructure is becoming a structural driver of electricity demand growth. The report notes that an increasing number of technology companies are turning to large-scale storage systems to support data center expansion while ensuring grid stability.

Shan Tomouk, head of battery energy storage systems (BESS) at Benchmark Mineral Intelligence, said storage is now “critical infrastructure for energy security” and emphasized the importance of regulatory frameworks that enable faster deployment.

Regional leaders and state-level growth

At the state level, Texas, Arizona and California led the country in utility-scale storage deployment during the first quarter of 2026, maintaining their position as the largest US storage markets.

The report also highlights that 71% of all utility-scale storage capacity installed in Q1 2026 was built in states that voted for President Donald Trump, while thirteen states now have explicit energy storage targets, supporting continued investment and expansion.

Other states, including Georgia, Iowa and Mississippi, also recorded notable increases in installed capacity during the quarter.

Strong momentum despite regulatory challenges

Despite strong growth, the report warns that permitting delays at the federal level could slow future deployment. SEIA estimates that 467 solar and storage projects currently have pending permits, making them vulnerable to delays or cancellation due to policy uncertainty.

Even so, the sector’s outlook remains strongly positive, with SEIA and Benchmark Mineral Intelligence pointing to continued growth driven by demand from industry, utilities and digital infrastructure.