Issuu

Q3 2026

U.S. Energy Storage Market Outlook Published: September 1, 2026

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Disclaimer

Q3 2026 US Energy Storage Market Outlook

All information, pricing and production data within this publication has been obtained directly by Benchmark Mineral Intelligence Ltd in accordance with Benchmark’s internal methodologies which can be viewed on Benchmark’s website. Secondary data has been obtained from various sources which are believed to be reliable and have been referenced accordingly. Estimations and forecasts have been highlighted where appropriate. The content provided is the independent opinion of Benchmark Mineral Intelligence Ltd and has been supplied solely for education and information purposes. Benchmark Mineral Intelligence Ltd is not an investment advisor, financial advisor or securities broker and subsequently withholds any liability for losses or damages incurred either directly or indirectly. The information provided herein is 'as is' and the authors/company make no warranties, express or implied, regarding its accuracy, completeness, or fitness for a particular purpose. All data reported in GWh/GW, MWh/MW, all prices reported in U.S. Dollars (USD) unless otherwise stated. To purchase the full report, please visit Benchmark's website here.

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Introduction to the Report Table of Contents Section 1

Executive Summary

Section 2

Utility-scale

Section 3

Residential

Section 4

Commercial & Industrial and Uninterruptible Power Supply

Section 5

Supply Chain, Trade, & Manufacturing

Section 6

Alternative Chemistries & LDES

Section 7

Forecasts

Key terms & glossary

Q3 2026 US Energy Storage Market Outlook

Benchmark BESS analyst team

SEIA Research and Storage Team

Iola Hughes, Head of Research

Emily Burlinghaus, Director of Energy Storage Manufacturing & Supply Chain

Shan Tomouk, BESS & Energy Research Lead

Joan White, Senior Director of Storage & Interconnection Policy

Pete Tillotson, Senior Analyst – BESS

Forrest Levy, Senior Solar and Storage Analyst

Calvin Xu, Analyst – BESS

Colin Smith, Director of Research

Varnika Agrawal – Senior Battery Analyst

Justin Baca, Vice President of Markets & Research

Media contacts Benchmark press@benchmarkminerals.com

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SEIA rskaar@seia.org

Q3 2026 US Energy Storage Market Outlook

SECTION

Executive Summary

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BESS market update and outlook In the first half of 2026, just under 31 GWh/10.3 GW of battery energy storage systems (BESS) entered operation across the utility-scale and behind-the-meter (BTM) markets, a y-o-y increase of 23% (GWh). The utility-scale market continued to underpin growth with 26 GWh/8.1 GW installed, with ten states bringing more than 500 MWh of new capacity online. In Q2, the U.S. added an all-time record of 20.2 GWh/ 6.7 GW. Of that, 18 GWh came from the utility space, largely supported by seven gigawatt-scale projects. In the BTM space, residential storage added 657 MWh and commercial and industrial (C&I) added 1.8 GWh. The Federal Energy Regulatory Commission (FERC) issued show cause orders under Section 206 to all six major U.S. Regional Transmission Organizations and Independent System Operators (RTOs/ISOs). The directive requires regional operators to justify or reform their existing rules concerning large-load interconnection tariffs within 60 days. This edition covers the directive, along with the responses that have been issued to date. The full Energy Storage Market Outlook report covers analysis of large load legislative updates, inverter supply chains, system pricing dynamics and developments in alternative chemistries within the manufacturing spotlight.

Q3 2026 US Energy Storage Market Outlook

U.S. BESS annual installed capacity outlook by market segment, GWh GWh 80

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BTM

71 +30% 59

+69%

40 30

20 10 0

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+20%

Utility-scale

2023

2024

2025

2026F

Quarterly market snapshot – Utility-scale & behind the meter

Q3 2026 US Energy Storage Market Outlook

Q2 2026 saw BESS deployments of 20 GWh, up 11% compared to Q2 2025. The utility-scale market alone added 18.0 GWh of capacity, with Arizona, California, Utah, and Texas each deploying over 2.5 GWh. Across the quarter, seven gigawatt-scale projects came online – four in Arizona, two in California and one in Utah.

Quarterly deployments by market segment, GWh

Q2 utility-scale capacity additions by paired resource by GWh

GWh 30

Standalone

Solar

56%

44%

Grid BTM +104%

Q2 number of utility-scale projects installed by capacity

52 7 10

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Q2 26

Q1 26

Q4 25

Q3 25

Q2 25

Q1 25

Q4 24

Q3 24

Q2 24

Q1 24

Q4 23

Q3 23

Q2 23

Q1 23

0-49

50-199

200-499

500-999

1,000+

Total

MWh © Benchmark Mineral Intelligence 2026

Residential BESS still faces headwinds

Q3 2026 US Energy Storage Market Outlook

Residential BESS deployments in Q2 2026 remained under pressure, with 657 MWh of additions, a 27% decrease y-o-y. This sharper decrease is indicative of both the decrease in installations as a result of the removal of 25D, but also the surge in installations last year as capacity was pulled forward ahead of the incentive change. The removal of 25D, while damaging in the short term, does not eliminate the underlying case for residential storage. Higher electricity costs, changes to net-metering, increased outage concerns, and increased support from states through virtual power plants and demand response schemes should help to support the industry in the long term. Increased backlash towards data center growth may also incentivize residential BESS, as private ratepayers look to shift risk away from increased electricity costs as a result of large load growth.

Quarterly residential BESS deployments, U.S.

Annual Residential BESS installations, 2023-2026F

MWh

1,000

+56%

3,500 894 794

800 578

600

400

330

387

444

413

3,000

791 641

619

-16% 3,215

599

657

2,687 +44%

2,500

2,063

2,000

454

1,500

1,433

1,000

200

500 0

Q3 2023

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2024

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2025

Q2 2026

2023

2024

2025

2026F

C&I to be driven by data centers

Q3 2026 US Energy Storage Market Outlook

U.S. C&I BESS demand continues to be shaped by the rapid expansion of data centers and the growing difficulty of securing sufficient grid capacity. As a result, “bring your own generation” is becoming an increasingly important development theme, with developers combining BESS with on-site or colocated solar and wind generation to increase energy independence, manage intermittency, and reduce exposure to grid constraints. Batteries can shift renewable output, manage rapid changes in data center demand, and provide short-duration backup, while high-power uninterruptible power supply (UPS) systems continue to address power quality requirements within facilities. Natural gas generation is also being paired with storage in some hybrid configurations where dispatchable capacity is required, to provide rapid ramping for integration of NG generators, or while permanent grid connections are being developed. However, these facilities have opened up data center developers to increased criticism and pushback due to environmental impact.

Quarterly C&I and UPS BESS deployments, U.S.

BTM BESS installations – C&I and UPS applications, 2024-2026F

MWh 2,400

GWh

2,200 2,000

1,845

1,800 1,535

1,600 1,400

1,212

1,200

973

1,000 800

34.46

2,337

723

698

761

782

899

980

960

1,103 9.47

600

6.85 4.64

400 200 0

Q3 2023

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2024

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2025

C&I

UPS

2026 © Benchmark Mineral Intelligence 2026

BESS manufacturing & technology trends

Q3 2026 US Energy Storage Market Outlook

BESS outlook by battery type

Manufacturing updates This quarter’s manufacturing spotlight focuses on Tesla’s manufacturing footprint in the U.S. and the shipping of its first Megapack units built with domestically produced LFP cells. The company also brought its third Megafactory online in Texas, which will carry a nameplate capacity of 50 GWh per year for Megapacks. Elsewhere, planned North America BESS manufacturing capacity now exceeds 250 GWh, with LGES set to be the largest player with 44 GWh of nameplate capacity planned by the end of 2026. LGES aims to increase capacity to over 100 GWh by the end of the decade. In July, L-H Battery Company Inc., the joint venture of LGES and Honda Motor Co., announced the production of its first battery cells produced at its recently completed manufacturing facility in Jeffersonville, Ohio. The facility, originally built to serve the EV market, is now producing cells for LGES's stationary energy storage system product offerings. Samsung SDI announced plans to begin production of its prismatic LFP battery cells in the U.S. in October 2026, with the company currently undergoing quality validation.

GWh 80 60 40

Lithium ion

Sodium ion

Flow batteries

Other

Lead acid

58.8

45.3

70.8

26.8

20 0

2023

2024

2025

2026F

Annual installed capacity BESS by anode GWh 80

Natural

LTO/Nb Oxides

Synthetic

Hard Carbon

60 40

Other Anode 58.8

45.3

70.8

26.8

2023

2024

2025

2026F

Li-ion BESS outlook by cathode type GWh 80 60 40

LFP

NMC

NCA

Other 44.1

57.5

69.0

25.5

0 seia.org

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2023

2024

2025

2026F

Key policy updates

Q3 2026 US Energy Storage Market Outlook

FERC issued orders directing all six RTOs to justify or reform large-load interconnection tariffs - data centers specifically, but with direct implications for co-located/hybrid storage.

July

Nebraska advanced bill LB1010 establishing a clearer framework through which energy storage development can take place.

June

Illinois enacted the Clean and Reliable Grid Affordability (CRGA) Act, which aims to deploy 3 GW of energy storage by 2030.

March

January

The U.S. policy landscape for BESS since the start of 2026 has been a balancing act between domestic manufacturing ambitions, immediate grid needs, and energy security. Though there remains no final guidance regarding the precise methodology for Material Assistance Cost Ratio (MACR) calculations, we have seen a plethora of announcements from states to codify the importance of energy storage by announcing targets and incentive structures. Given the expected load growth across U.S. grids being driven by industries such as AI, we expect more of these announcements in future.

FCC announced a ban on foreign-made inverters. The ban only pertains to future models of inverters. Previouslyapproved models will be permitted, as well as those that meet domestic content requirements.

China Section 301 tariff increase, IEEPA ruled unlawful, subsequent Section 122 tariffs (now expired) and new Section 301 investigations From January 1, 2026, China's Section 301 tariff on non-EV lithium-ion batteries rose from 7.5% to 25%, stacking on the existing 23.4% base. In February, the Supreme Court ruled IEEPA tariffs unlawful, triggering reimbursements; a 10% Section 122 tariff followed for 150 days. Two new Section 301 investigations (forced labor, excess capacity) launched in March. In July, Section 122 tariffs expired as the forced-labor Section 301 action took effect (10–12.5%); the excess-capacity probe remains ongoing.

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April

January - Aug

2026

Virginia passed procurement requirements of over 20 GW for utilities, including strong mandates for long-duration and distributed storage.

Federal policy State policy/target Tariffs

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Key terms & glossary Energy:

BESS - Battery Energy Stationary Storage RES - Renewable Energy Source VRE - Variable Renewable Energy DSR - Demand Side Response DSM - Demand Side Management LCOE – The Levelized Cost of Energy/Electricity BTM – Behind the meter

Battery:

LTO - Lithium–Titanate LFP - Lithium Iron Phosphate LMNO – Lithium Manganese Nickel Oxide LMO - Lithium Manganese Oxide NMC/NCM - Lithium Nickel Manganese Cobalt Oxide NCA - Lithium Nickel Cobalt Aluminum Oxide LCO - Lithium Cobalt Oxide VRFB - Vanadium Redox Flow Battery Na-ion – Sodium ion

Other Storage types:

CAESS - Compressed Air Energy Storage System FESS - Flywheel Energy Storage System PHSS - Pumped Hydro Storage System TESS - Thermal Energy Storage System

General:

RHS – Right hand side LHS – Left hand side YTD – Year-to-date y-o-y – Year-over-Year seia.org

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Q3 2026 US Energy Storage Market Outlook

Terminology:

Rated Power Capacity [GW/MW] - how much power can flow in/out a battery at a given time Energy Storage Capacity [GWh/MWh] - how much energy can be stored Storage Duration [hour] - amount of time storage can discharge at its power capacity before depleting its energy capacity Round-trip efficiency [%] - the quantity of electricity which can be recovered as a percentage of the electricity used to charge and discharge the device.

Notes on battery chemistry classifications:

The chemistry classifications used in this report are designed to provide representative coverage of the total market, while still being broad enough to facilitate a useful comparative analysis between categories. It should be noted that within categories there is significant variation in the actual chemistry and material mix. In addition, different chemistry cathodes are often blended in order to achieve certain performance or cost parameters for a given projects. The classifications used in this report are below, along with subcategories included in each broader grouping. These groupings are open to review as new chemistries become more dominant.

Cathode:

LFP, LMO, NCA, NMC111, NMC523, NMC622 (includes NMC613, NMC712), NMC811 (includes NMCA), Other (includes Lithium Sulphur, Metal Air and other early stage technologies)

See here for our disclaimer and sources

Key terms & glossary

Q3 2026 US Energy Storage Market Outlook

Energy storage: The capture of energy produced at one time for use at a later time. Storage involves the conversion of energy from a form that is difficult to store to a form that is more convenient or economical to store for a longer period of time. Storage technologies can be the following:

Batteries

Rechargeable batteries range in size from button cells to MW grid-scale, and store energy in an electrochemical cell. Battery chemistries include lithium-ion, lead acid, sodium based and nickel based. Flow batteries operate by passing a solution over a membrane where ions exchange to charge or discharge the cell.

Hydropower

The oldest form of energy storage, it currently accounts for over 90% of the global energy storage capacity. Stores energy by using off-peak electricity to pump water from a lower reservoir to an upper reservoir, and recovers energy at peak times by turbine generation when the water flows back to the lower reservoir.

Flywheel

Stores energy in the form of rotational kinetic by accelerating a rotor/flywheel to a very high speed, added energy increases the speed, extracted energy decreases the speed.

Compressed Air

Stores energy in an underground structure or an above-ground system, by running an electric motor to compress air at times of low demand and then releasing it through a turbine to generate energy at times of high-energy demand.

Sensible heat

The temporary storage of energy in the form of heat, utilizing the sensible heat of a material, materials can be stored in contained aquifers, geological features like bedrock or old mines with the heat or cold from the material used months to years later.

Latent heat

Latent heat storage works by the transfer of heat to or from a material to change its phase, e.g. a steam accumulator utilizing the phase change of water from liquid to gas.

Chemical

Hydrogen

Stored hydrogen is a form of energy, it can be used to produce electricity via a hydrogen fuel cell through the process of electrolysis. Hydrogen can either be produced in situ or produced elsewhere and delivered.

Other

There are many other technologies in use, being explored and developed, including capacitors. chemical storage, superconducting magnets, solid mass-gravitational storage, cryogenic thermal and biological storage

Electro chemical

Mechanical

Thermal

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Key terms & glossary

Q3 2026 US Energy Storage Market Outlook

Utility-scale and BTM ESS • Energy Stationary Storage (ESS) applications can be split into two broad categories, with the BTM market further classified into two broad markets: • Utility-Scale, storage connected to distribution or transmission networks, or in connection with electricity generation. • Front-of-the-meter distribution connected (Middle Market), systems 1-20 MW (2-4 MWhs) connected to the distribution grid used for peak shaving, renewable integration, avoided distribution grid upgrades, and grid support. • Behind the meter (BTM), storage interconnected behind the utility meter of commercial, industrial or residential customers, primarily aiming at electricity bill savings, and energy resiliency.

ESS Utility-scale

Standalone

Distribution networks

Transmission networks

Renewable / generation paired

BTM

Residential

Commercial & Industrial

Generation pairing

Back-up power,

Back-up power

Microgrids EV DC fast charging UPS for Telecoms & Data centers

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