The energy storage industry has undergone a remarkable transformation over the past decade, evolving from a fledgling market to a major player in the US grid. In 2025, the industry set an ambitious goal to deploy 35 gigawatts of batteries connected to the grid by the end of the year. Fast forward to the present, and it’s clear that this target has not only been met but exceeded, with over 40 gigawatts of batteries already deployed. The third quarter alone saw the installation of 4.7 gigawatts of batteries, accounting for nearly half of all new renewable power added to the grid during that period.
This surge in energy storage capacity is largely driven by the growing demand for renewable energy sources, which have become the leading source of new power on the US grid. States like Arizona, California, and Texas, which have faced grid strain in recent years, have been at the forefront of this trend, with significant investments in battery storage. The lessons learned in these regions can be applied to other parts of the country, such as the Midwest and East Coast, where data center construction is putting a strain on the grid.
Startups are taking notice of this trend and are innovating to meet the growing demand for energy storage. Companies like Redwood Materials, founded by Tesla alumnus JB Straubel, are repurposing used EV batteries for grid-scale storage. Redwood has set an ambitious target of deploying 20 gigawatt-hours of battery storage by 2028 and has secured $350 million in funding to support this effort. Another startup, Base Power, is taking a different approach by leasing batteries to homeowners and aggregating them to create virtual power plants. The company has raised $1 billion to build a battery factory and expand its operations beyond Texas.
While lithium-ion batteries have dominated the market, other startups are exploring alternative technologies to reduce storage costs. Sizable Energy is working on a novel approach to store power in flexible reservoirs that float in the open ocean. Fourth Power is using blocks of carbon to store heat at high temperatures, aiming to deploy them in 2028 at a lower cost than lithium-ion batteries. XL Batteries is deploying its flow-battery technology at petrochemical storage sites, allowing for the storage of hundreds of megawatt-hours using existing infrastructure. Cache Energy has developed inexpensive pellets of calcium hydroxide that can store energy for months with minimal losses.
The energy storage industry’s exponential expansion has significant implications for the future of global energy markets. Paired with solar and wind power, which remain the cheapest forms of new electricity, energy storage has the potential to rewire the US grid and beyond. As the industry continues to innovate and mature, it’s likely that we’ll see even more creative solutions emerge to meet the growing demand for renewable energy and energy storage. With the US grid on the cusp of a major transformation, one thing is clear: the future of energy is looking brighter and more sustainable than ever.
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