The US energy storage industry is targeting 225GW/1TWh of storage deployments by the end of 2032, according to an analysis published by the Energy Storage Coalition (ESC).
Released this month (September), the report, titled The Terawatt-Hour Opportunity, said that battery energy storage systems (BESS) offer the speed to power, reliability and flexibility to address America’s energy demand challenge whilst fortifying energy security, provided policy and regulatory frameworks enable the industry to scale at the pace the US power system demands.
The US energy storage industry has undergone one of the fastest expansions of any part of the American power sector. In just a few years, energy storage has moved from an emerging technology to what the ESC describes as a foundational backbone of the American power grid.
Energy storage capacity has grown from 1.5GW at the end of 2020 to 52GW by mid-2026, with the industry now targeting 225GW by the end of 2032.
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Deployment targets and growth projections
According to the report, 1TWh over the next five years requires a 25% compound annual growth rate (CAGR). This represents more than 300% growth in power capacity and 500% growth in energy capacity for energy storage resources over the next five years.
Energy storage capacity will reach more than 20% of current US peak electricity demand, with energy storage resources operating in all 50 states. The 225GW of energy storage capacity is equivalent to peak power supply for Texas, California, Florida and Michigan combined.
The deployment range scenarios through 2035 were assessed based on cumulative estimates from Wood Mackenzie, ACP, BNEF, McKinsey & Company, Baringa Partners, Aurora and E3.
Drivers of market acceleration
ESC identified three key factors driving the acceleration of the grid-scale energy storage market.
Grid flexibility requirements: The power system has become more dynamic, with electricity supply and demand changing more rapidly, renewable generation expanding, and grid operators increasingly needing resources that can respond instantly, shift power across hours and provide capacity when most valuable. Storage is uniquely capable of doing all three.
Urgent capacity needs: After decades of relatively flat electricity consumption, load growth from manufacturing, electrification, artificial intelligence (AI) and other large power users is creating an urgent need for new capacity. Storage can be deployed quickly, help unlock constrained grid capacity and make existing generation and transmission infrastructure work harder whilst longer-lead infrastructure catches up.
Cost reduction: Storage can replace expensive peak power, reduce price spikes, defer costly grid investments and extract more capacity from infrastructure already paid for by consumers. Rather than solving each grid need with a separate investment, storage can provide capacity, energy, congestion relief and essential grid services from the same asset.
Economic benefits
The analysis projects that energy storage will generate more than US$250 billion in cost savings over the next decade by scaling deployment to 850+ GWh. The cumulative energy system cost savings average out to US$1,550 across all 160 million American ratepayers.
BESS helps to deliver cost savings by efficiently boosting grid utilisation, avoiding more expensive or unnecessary infrastructure upgrades, lowering peak pricing and maximising the output of existing power generation resources on the grid.
The analysis highlighted Texas as a case study demonstrating the dual benefits storage can deliver to boost reliability and lower costs. The state achieved US$1.5 billion in savings over summer and winter extreme weather events in 2024, whilst grid emergencies reduced from 13 in 2023 to zero in 2025.
Similarly, in May, ACP published its second annual ‘State of Clean Energy Manufacturing’ report, which claimed the US can currently produce enough solar and BESS modules to meet domestic demand, stating, “Rapid growth in solar and storage production, sustained wind manufacturing, and rising investment in critical minerals are reshaping the nation’s energy supply chain.”
