A recent webinar organized by the Clean Energy States Alliance (CESA) and the Energy Storage Technology Advancement Partnership explored the current state of the U.S. energy storage industry in 2024 and what to expect in 2025. By November 2024, the energy storage capacity in the U.S. had exceeded 25,000 installed megawatts. Although deployment began to scale rapidly in 2021, it saw significant acceleration two years later.
“Standalone energy storage became eligible for the Investment Tax Credit in January 2023,” noted Todd Olinsky-Paul, a senior project director at CESA. He emphasized that the combination of the Investment Tax Credit (ITC) and various state-level policies contributed to the surge in deployments. “The 30% tax credit has been fundamental to the storage industry’s growth,” stated Joan White, the director of storage and interconnection policy at the Solar Energy Industry Association (SEIA). She added, “We’ve seen year-over-year growth in the range of 80-85 percent in storage over the last two years.”
However, there are efforts to repeal certain provisions of the Inflation Reduction Act (IRA), including the standalone storage tax credit, as part of budget balancing initiatives. “We don’t need to convince everyone it’s worth keeping, but we do need to convince some key Republican allies,” White asserted.
The rapidly evolving trade policies further complicate the landscape. A new 10% tariff on Chinese goods and ongoing antidumping and countervailing (AD/CVD) investigations into specific Chinese battery components could disrupt supply chains. Recently, the International Trade Commission and Department of Commerce announced that they would proceed with investigations into certain battery components from China. If countervailing duties are imposed, White warned, “we could see tariffs up to 800-900% on active anode materials, which would have dramatic impacts on the electric vehicle and storage industries.”
Concerns about China’s dominance in battery manufacturing are also on the rise. “They have a massive overcapacity problem, which becomes a challenge for us in the United States as we work to build that capacity domestically,” explained Jim Greenberger, executive director of NAATBatt. “As long as they keep their factories running, it will undercut efforts to build a domestic U.S. supply chain.”
Additionally, the demand for energy storage is being driven by artificial intelligence (AI) and data centers. AI-driven energy needs fluctuate significantly throughout the day, increasing the demand for storage solutions. “By 2028, the electricity demand from AI data centers could account for 12% of the total U.S. electricity demand, roughly equal to all the electricity produced by renewable sources currently connected to the grid,” Greenberger noted. “Storage will be essential to balance the energy load.”
Looking ahead, Russ Weed, president of CleanTech Strategies, anticipates that the industry will adopt financing models that ensure revenue stability. “Tolling agreements have long been used for natural gas power plants, and now we’re seeing them emerge for energy storage as a way to guarantee revenue,” he stated.
The webinar also addressed updates to state-level storage policy frameworks and revisions to fire code regulations surrounding energy storage following the Moss Landing battery fire.
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