The US installed 5.4 GW/18.9 GWh of battery energy storage systems in the second quarter of 2026, setting a new quarterly record in terms of energy capacity.

According to the latest US Energy Storage Monitor, released by the American Clean Power Association (ACP) and Wood Mackenzie, GWh deployments increased 17% year-on-year, despite a 7% decline in newly installed power capacity, measured in GW, compared with the same quarter of 2025.

The divergence between the two figures largely reflects the deployment of battery systems capable of storing energy for longer periods. The national average duration of newly installed battery storage systems increased from 2.8 hours in Q2 2025 to 3.5 hours a year later, driven by growing resource adequacy needs.

Utility-scale storage accounts for 17.6 GWh

The utility-scale segment continued to account for the vast majority of new capacity, with 4.7 GW/17.6 GWh deployed during the second quarter.

In power terms, utility-scale installations declined 8% year-on-year as some key markets became increasingly saturated. However, deployments during the first half of 2026 were 5% higher than in the same period of 2025.

Average project duration continued to increase during the quarter, partly driven by a long-duration storage project in California designed to support state targets and utility-contracted storage assets deployed in Texas.

“Battery storage is one of the most important tools we have to meet growing electricity demand,” said John Hensley, Senior Vice President of Markets and Policy Analysis at American Clean Power.

Hensley highlighted storage’s ability to be deployed quickly, strengthen grid reliability and enable the power system to make better use of both existing and new generation.

Residential storage installs 676 MW

The residential segment recorded its fourth-largest quarter on record, with 676 MW installed. This represented a 15% decline from the previous quarter but a 3% increase year-on-year.

California, Texas, Puerto Rico, Arizona and Illinois collectively accounted for 88% of residential storage capacity installed in Q2, although all five markets recorded quarter-on-quarter declines.

Puerto Rico posted the largest decline in absolute terms, falling from 129 MW in Q1 to 73 MW in Q2.

Meanwhile, the national residential solar-plus-storage attachment rate reached 46%, up from 41% in the second quarter of 2025.

Despite these figures, ACP and Wood Mackenzie expect the US residential storage market to contract by 4% in 2026, amid the elimination of tax credits, consumer hesitancy and a challenging transition toward third-party ownership models.

Commercial and industrial segment installs 48 MW

The community, commercial and industrial (CCI) segment deployed 48 MW during the quarter, returning to historical deployment levels following California’s record first quarter, which was driven by the deadline to qualify under the state’s Net Energy Metering 2.0 framework.

Overall, the segment declined 2% year-on-year, although above-average growth in Hawaii, New Mexico and Texas helped offset some of the contraction.

US storage capacity could reach 207 GW/715 GWh by 2031

The outlook points to strong expansion over the next five years. ACP and Wood Mackenzie expect annual US energy storage installations to grow by more than 50% in MW terms over that period.

Under the forecast, cumulative installed storage capacity in the country would reach 207 GW/715 GWh by 2031.

One of the main drivers will be rapidly increasing electricity demand from data centers. Wood Mackenzie expects utility-scale storage to grow at an average annual rate of 8% over the next five years.

“Data center buildout strengthens the US storage outlook across all sectors,” said Allison Feeney, research analyst at Wood Mackenzie.

According to Feeney, as hyperscalers face increasing grid-connection bottlenecks, utility-scale storage can provide faster access to the power capacity required by data centers.

The CCI segment is projected to grow 27% between 2026 and 2031, supported by deployment expanding beyond California into emerging markets such as Maryland and Texas. The residential market is also expected to rebound from 2027 and grow at an average annual rate of 9% through 2031.

Utility-scale battery system prices fall 2%

The report also points to declining costs. Utility-scale battery system prices fell 2% year-on-year to $916/kW in the second quarter of 2026.

At the same time, the share of hybrid utility-scale installations declined to 33%, down from 45% in Q2 2025, mainly due to a contraction in the California market.

Supply chain dynamics remain a key source of uncertainty. Potential trade restrictions could create near-term bottlenecks and lead to some stagnation in the utility-scale segment during 2026 and 2027.

Wood Mackenzie nevertheless expects growth to resume in 2028 and average 11% annually through 2031, supported by the expansion of domestic battery cell manufacturing.

Against this backdrop, slowing electric vehicle demand is providing an unexpected boost to stationary storage. Allison Weis, Global Head of Energy Storage at Wood Mackenzie, said manufacturers are repurposing idle EV cell production capacity, helping accelerate the development of the domestic storage supply chain.