Energy Storage Market Projected to Reach US$ 486.18 Billion by 2035, Supported by Large-Scale Deployment in China Says Astute Analytica

Plummeting hardware costs and urgent renewable integration needs are driving explosive market growth. Energy storage is transitioning from niche technology to essential global infrastructure, supported by aggressive government policies and the critical requirement for grid stability and decarbonization.

Chicago, Jan. 20, 2026 (GLOBE NEWSWIRE) — The global energy storage market was valued at US$ 50.16 billion in 2025 and is projected to reach USD 486.18 billion by 2035, growing at a CAGR of 25.50% during the forecast period 2026–2035.

The energy storage market is undergoing a seismic transformation, evolving from a supplementary grid asset into the fundamental backbone of global power infrastructure. This unprecedented growth is propelled by the urgent necessity to firm intermittent renewable generation and the plummeting costs of Lithium Iron Phosphate (LFP) technology, which now underpins 87% of global installations.

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Regionally, North America commands the financial landscape, controlling nearly 80% of market value through massive utility-scale deployments and supportive frameworks like the Inflation Reduction Act. Conversely, Asia Pacific serves as the industrial engine, driving global volume through China’s manufacturing dominance and aggressive solar integration. Strategically, the market is witnessing a fierce battle for supremacy between manufacturing titan CATL and technology integrator Tesla, while emerging technologies like sodium-ion and hydrogen reshape long-duration economics. As grid operators move beyond pilot phases to gigawatt-scale execution, energy storage has firmly established itself as the critical enabler of a resilient, decarbonized future.

Key Findings in Energy Storage Market

• Dominant Region: North America (79.71%)
• Fastest Growing: Asia Pacific
• By Application: Grid Energy Storage (Largest)
  By Technology: Lithium Ion Battery (Largest)
  By End Use: Residential (Largest)

Grid Energy Storage Captures Dominant Revenue Share Driven by Multi Gigawatt Infrastructure Projects

The grid energy storage commands the lion’s share of global energy storage market in terms of capital investment, a dominance necessitated by the operational requirements of modern transmission networks. Unlike smaller segments, grid energy storage relies on massive infrastructure projects that serve as critical capacity assets. A prime example justifying this market hegemony is the completion of the Edwards Sanborn Solar and Energy Storage project in California, which stands as the largest single facility of its kind in the Western Hemisphere. Operated by Terra-Gen and Mortenson, this facility alone boasts over 3,000 MWh of capacity, illustrating how a single grid energy storage site can equal the capacity of tens of thousands of residential units.

Furthermore, financial disclosures from system integrators validate this segmental leadership in the market. Fluence Energy, a global leader in the sector, reported a contracted backlog of approximately $3.7 billion in fiscal year 2024, derived almost entirely from utility-scale mandates. This financial volume highlights that grid operators are prioritizing long-duration energy storage assets to replace retiring coal and thermal generation. In the United Kingdom, the T-4 Capacity Market auctions have seen battery assets securing record contracts, proving that grid energy storage is no longer just for frequency regulation but is now a foundational pillar of national energy security strategies. The sheer transactional value and GWh volume of these infrastructure-grade assets ensure this segment remains the definitive market leader.

Lithium Ion Technology Controls Over 90% Share Leveraging Electric Vehicle Supply Chains

Lithium-ion chemistry maintains an unassailable stronghold on the energy storage market landscape, primarily because it benefits from the massive economies of scale created by the global electric vehicle (EV) industry. This technological dominance is not merely about performance but industrial synergy; as EV manufacturers ramp up cell production, the spillover effect drastically lowers costs for stationary energy storage applications. LG Energy Solution and BYD have effectively utilized their automotive battery production lines to supply the stationary market, creating a barrier to entry that alternative chemistries like flow batteries cannot currently breach due to a lack of manufacturing infrastructure.

Recent operational data confirms this monopoly. The drastic reduction in lithium carbonate prices throughout 2024, which fell from previous highs to stabilize at lower levels, has made lithium-ion energy storage systems economically viable for arbitrage applications that were previously cost-prohibitive. Annual reports from diversified chemical suppliers in the energy storage market indicate that cathode production is being overwhelmingly allocated to lithium-ion variants to satisfy this dual demand.

Furthermore, the “bankability” of lithium-ion technology is unmatched; project financiers and insurers prioritize this chemistry due to its decades of field data. Until alternative technologies can demonstrate similar operational maturity and secure gigafactory-scale production capacity, lithium-ion will continue to dictate the technical standards and pricing structures of the entire energy storage industry.

Residential Energy Storage Secures Top Unit Share Fueling Virtual Power Plant Expansion

While utility projects claim capacity records, the residential segment dominates the energy storage market in terms of unit volume and decentralized market penetration, driven by the rapid evolution of Virtual Power Plants (VPPs). This segment has transitioned from simple backup power to active grid participation. In the United States, Sunrun, the leading residential solar and storage installer, revealed that its storage attachment rates on new installations in California skyrocketed to over 50% following regulatory shifts like NEM 3.0. This is not a passive adoption; these distributed assets are being aggregated to perform grid-scale functions.

The dominance of residential energy storage in the energy storage market is further evidenced by the successful activation of distributed networks during peak demand events. During recent grid strain events in Texas and California, aggregated fleets of Powerwalls and equivalent residential batteries exported megawatts of power back to the grid, earning homeowners revenue while stabilizing the network. This “bring your own device” model is rapidly expanding in Japan and Italy as well, where government subsidies explicitly target hybrid inverter systems. The insight here is clear: the residential energy storage market is expanding because it unlocks a dual-value stream—providing security for the homeowner while simultaneously acting as a dispatchable asset for the utility. This unique value proposition ensures that residential storage remains the most pervasive form of battery deployment globally.

Unprecedented Global Deployments Signal A Mature and Expanding Energy Landscape

Global demand within the energy storage market is accelerating at a historic pace, driven by grid modernization and renewable integration. In 2024 alone, the sector witnessed absolute battery energy storage system (BESS) deployments reach a staggering 205 GWh globally. Grid-scale applications dominated this surge, accounting for 160 GWh of total installations, proving that utility-level adoption is the primary growth engine. Data from InfoLink Consulting (Jan 2025) corroborates this massive expansion, recording 175.4 GWh of installed capacity added across all segments during the same period.

Looking ahead, the trajectory remains aggressively upward in the energy storage market. Projections for 2025 suggest global additions will hit 92 GW of power capacity, translating to 247 GWh in energy terms. Such momentum places the cumulative global fleet on track to reach 1.9 Terawatts (TW) by 2035. Even specific regional markets show robust health, with the European Union adding 18.5 GWh of utility-scale capacity in 2024. Stakeholders must recognize that the energy storage market has transitioned from a niche pilot industry to a fundamental pillar of global power infrastructure.

China Continues to Lead Global Volumes Through Massive Domestic Infrastructure Buildout

China remains the undisputed heavyweight champion of the energy storage market, driven by unparalleled renewable generation. The nation deployed 108 GWh of new grid-scale capacity in 2024. A primary driver for this consumption was the connection of 340 GW of solar PV in 2024, creating an immediate requirement for stabilization (IEA, Mar 2025). Consequently, China accounted for 100 GWh of all new BESS projects commissioned globally throughout the year (Rystad Energy, May 2025).

Domestic industry players are reaping significant rewards from this local dominance. CATL generated domestic revenue of 251.68 billion yuan in 2024. Furthermore, the country commissioned 850 new projects in the first half of 2024 alone. Infrastructure goals remain ambitious, with mandates contributing to 30 GW of non-hydro storage by 2025 (IEA Policy Review). Technological milestones are also evident, such as the Jimusar station connecting a 1,000 MWh vanadium flow system. These figures confirm that China acts as the central volume driver for the entire energy storage market.

United States Grid Capacity Expands Rapidly Across Key Strategic States

The United States energy storage market demonstrated remarkable depth and resilience throughout 2024. Developers deployed 12.3 GW of power capacity, totaling 37.1 GWh in energy terms for the full year (Wood Mackenzie/ACP, Mar 2025). Regional breakdowns highlight California’s leadership, where cumulative capacity reached 13,391 MW (13.4 GW) by September 2024 (California Energy Commission, Oct 2024). Meanwhile, the interconnection queue in California has swelled to 177 GW, signaling immense future demand.

Texas serves as another critical growth hub. The ERCOT grid saw 1.2 GW of utility-scale storage installed in Q4 2024 alone (Energy Capital HTX, Apr 2025). Total battery capacity in the state climbed to 9.3 GW by October 2024 (Texas Comptroller, 2024). Federal support reinforces this momentum, evidenced by the Department of Energy finalizing a USD 15 billion loan to Pacific Gas & Electric in December 2024 (DOE, Dec 2024). Such capital injections ensure the US remains a lucrative geography for energy storage market participants.

Lithium Iron Phosphate Dominates While Flow and Sodium Technologies Emerge

Technological choices within the energy storage market heavily favor Lithium Iron Phosphate (LFP) chemistry. LFP commanded 87% of global installations in 2024 due to its safety and cost profile. However, alternative chemistries are gaining traction. Flow battery deployments rose significantly to 2.3 GWh globally in 2024 (Rho Motion, Jan 2025). Simultaneously, the manufacturing capacity for sodium-ion batteries hit 70 GWh, with 14 new entrants launching production lines.

Operational metrics are evolving alongside chemistry changes. New projects in the US now average over 3 hours in duration. Latin America exceeds this, with average project durations reaching 4.2 hours . Sodium-ion deployments, though nascent, reached approximately 300 MWh in 2024 (Rho Motion, Jan 2025). These shifts indicate a maturing energy storage market seeking diverse solutions for longer-duration requirements.

Plummeting Component Costs Significantly Improve Project Economics Globally

Rapid price deflation is the most critical catalyst currently fueling the energy storage market. In 2024, the global volume-weighted average price for lithium-ion battery packs fell to USD 115 per kWh. China led this trend, with pack prices dropping to USD 94 per kWh and cell prices trading between USD 40–45 per kWh. Consequently, turnkey BESS system costs in China hit a record low of USD 82 per kWh in Q3 2024 (Rho Motion, Dec 2024).

International pricing remains higher but follows a downward curve in the energy storage market. Global average rack prices for stationary systems dropped to USD 125 per kWh. However, trade barriers create regional disparities. US four-hour turnkey costs are projected to rise to USD 266 per kWh in 2025 due to tariffs. In contrast, building a project in Great Britain averaged GBP 580,000 per MW in 2024 (Modo Energy, Nov 2024). Investors must navigate these regional variances carefully.

Manufacturing Oversupply Creates Buyer Leverage and Drives Export Volumes

Supply chain dynamics in the energy storage market are defined by massive overcapacity. Global battery manufacturing capacity online reached 3.1 TWh in 2024, creating a surplus 2.5 times greater than demand. This glut fueled total storage cell shipments of 314.7 GWh. Utility-scale applications consumed 283 GWh of these shipments, with large-format 300Ah+ cells capturing nearly 50% market share in Q4 2024.

Export markets in the global energy storage market absorbed a significant portion of this production. Non-China regions received 137.3 GWh of cell shipments in 2024. Leading manufacturer CATL exemplified this scale, shipping 93 GWh of storage systems globally (Metal.com, Mar 2025). Such oversupply ensures that hardware availability will not constrain the market in the near term.

Robust Capital Inflows and Venture Funding Fuel Strategic Industry Growth

Financial confidence in the energy storage market soared throughout 2024. Total corporate funding for the sector reached USD 19.9 billion. Debt and public market financing contributed the majority, accounting for USD 16.2 billion. Venture capital activity remained healthy, with full-year funding settling at USD 3.7 billion across 84 deals.

Notable VC deals highlight a strong appetite for next-generation technologies. Iron-air developer Form Energy raised USD 405 million, marking the year’s largest deal. Sila Nanotechnologies secured USD 375 million, while EnerVenue Holdings raised USD 308 million for metal-hydrogen tech. Additionally, VC funding for the first nine months alone totaled USD 2.7 billion. These figures validate strong investor sentiment.

Top Tier Battery Giants Battle for Revenue and Global Market Share

Competition at the top of the energy storage market is intensifying between established titans. CATL held a commanding 36.5% global market share in shipments for 2024. The company’s storage division generated 57.29 billion yuan in revenue, contributing to a total net profit of 50.7 billion yuan. Tesla also delivered exceptional results, deploying 31.4 GWh of storage products, a 114% year-over-year increase.

Tesla’s financial performance reflects this operational success. The company’s energy generation and storage revenue reached USD 10.1 billion in 2024. Q4 2024 was particularly strong, with Tesla deploying 11.0 GWh in a single quarter. These giants continue to consolidate power, leaving smaller players to compete for niche segments within the broader energy storage market.

Government Policies and Massive Infrastructure Projects Shape Future Outlook

Geopolitical maneuvers and mega-projects define the current market landscape. Trade policies are tightening, with US tariffs on Chinese EVs finalized at 100% and battery parts at 25% in 2024. Furthermore, Section 301 tariffs on non-EV batteries will hit 25% in 2026, while LFP cells face an effective 64.9% rate. Despite these hurdles, the DOE deployed USD 12 billion for supply chains and USD 15 million for long-duration projects.

Project execution remains robust globally in the energy storage market. California’s Edwards & Sanborn project came online with 3,287 MWh. The Wuhai semi-solid-state project reached 800 MWh. In Europe, Belgium’s Green Turtle targets 2.8 GWh, and Eneco completed a 200 MWh facility. Meanwhile, UK’s Sunnica advances 500 MW, Germany’s Kyon Energy pushes 275 MWh, and China connected a 100 MWh sodium-ion site in Hubei. Even with European residential installs dipping to 11 GWh, the macro picture remains incredibly bullish.

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Energy Storage Market Major Players:

• BYD
• CATL
• Fluence
• General Electric
• Green Charge
• LG Energy Solution
• Panasonic
• Samsung SDI
• Siemens
• Tesla
• Other Prominent Players

Key Market Segmentation:

By Technology

• Lead Acid Battery
• Lithium Ion Battery
• Flow Battery
• Sodium Sulfur Battery
• Compressed Air Energy Storage

By End Use

• Commercial
• Residential
• Transportation
• Industrial
• Utility

By Application

• Electric Vehicle Charging
• Renewable Energy Integration
• Uninterruptible Power Supply
• Residential Energy Storage
• Grid Energy Storage

By Region

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• South America

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About Astute Analytica

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