Texas set to surpass California in battery storage capacity

A recent report suggests that Texas is on track to surpass California in battery storage capacity in the coming years. The US Energy Storage Market Outlook Q1 2026, compiled by the Solar Energy Industries Association (SEIA) and Benchmark Mineral Intelligence, reveals a significant increase in energy storage installations in the US, reaching a record 57.6 GWh in 2025, marking a 30% year-over-year growth.

Utility-scale storage installations in the US have quadrupled in the past three years, registering a total of 137 GWh by 2025. In addition, there were 19 GWh of commercial and industrial systems and 9 GWh of residential storage capacity installed across the country. Projections indicate that the momentum in energy storage deployment will persist, with an estimated 600 GWh of storage capacity expected to be implemented nationwide by 2030, despite potential challenges from shifting federal policies.

The data shows that a significant portion of the utility-scale storage capacity installed in 2025 was concentrated in red states, with nine of the top 15 states for new installations falling in this category. Texas, in particular, is anticipated to overtake California as the largest battery storage market in the US in 2026.

Notable trends in energy storage implementations include the rise of standalone battery projects which accounted for nearly 30 GWh of new capacity in 2025, as well as an increase in solar-plus-storage installations amounting to about 20 GWh. Residential storage deployments also saw growth, reaching 3.1 GWh in 2025, representing a 51% rise from the previous year. Virtual power plant programs in states such as Massachusetts, Texas, Arizona, and Illinois have played a crucial role in promoting adoption by reducing costs and enhancing grid reliability during peak demand periods.

The report highlights the adaptation of the supply chain to support the expanding energy storage market. In 2025, some battery cell manufacturers transitioned their production from electric vehicle batteries to dedicated stationary storage cells, repurposing existing production lines and adjusting future plans to meet the growing demand. The manufacturing capacity for lithium-ion cells intended for stationary storage exceeded 21 GWh in 2025, with US factories now capable of producing up to 69.4 GWh of battery energy storage systems annually.

SEIA’s interim president and CEO, Darren Van’t Hof, emphasized the importance of federal support for the industry, warning that without intervention, consumers may face higher electricity costs and a less reliable energy system. Benchmark Minerals research head, Iola Hughes, emphasized the critical role of energy storage in meeting the rising demands for electricity, particularly with the growth of data centers and AI infrastructure, underscoring the necessity for a resilient and efficient grid system.

The ongoing growth in energy storage installations not only underscores its increasing importance but also its transformation into essential infrastructure. Despite policy uncertainties, the fact that the energy storage sector continues to accelerate underscores the underlying demand for this technology. Storage capacity expansion, particularly in red states, suggests a shift in perspective, viewing energy storage not as a partisan solution but as an essential tool for grid reliability and cost-efficiency. If future projections materialize, with the US reaching 600 GWh of storage capacity by 2030, batteries are poised to become a fundamental component of the electricity system, signaling a move towards a more integrated and robust energy infrastructure.