U.S. Energy Storage Market on the Rise: Demand for Lithium-ion Batteries Expected to Surge by 2026

The United States energy market has been experiencing significant growth, with projections indicating that by 2026, the demand for renewable energy sources, particularly solar energy, will continue to rise sharply. As of October 14, 2025, the market dynamics show that the renewable energy sector is set to expand rapidly.

According to industry reports, from 2010 to 2023, the cost of lithium-ion batteries has decreased by nearly 90%. This dramatic reduction has paved the way for large-scale renewable energy systems to become more economically viable. It is projected that by 2024, the utility-scale solar energy market will reach approximately $106.9 billion, with forecasts suggesting an increase to $439.7 billion by 2030. This represents a compound annual growth rate of 27% from 2025 to 2030.

As of 2022, the solar energy sector had already exceeded $200 billion in investments, with utility-scale solar accounting for over 65% of total expenditures, highlighting the strong demand from large-scale renewable energy systems. The energy system has begun to achieve approximately 200 gigawatts of capacity, which allows for increased renewable energy integration into the grid.

For instance, the solar energy projects in California are expected to meet a peak demand of around 30,000 megawatts during the hottest periods of the day. From 2024 onward, the utility-scale renewable energy systems will focus on leveraging peak electricity needs and addressing the grid’s flexibility requirements.

As of 2023, hydropower remains the largest form of renewable energy in the U.S., with a capacity of around 181 gigawatts. However, battery storage technologies, particularly those capable of providing short-term energy storage (under 8 hours), are becoming increasingly important due to their efficiency under high demand conditions.

The renewable energy sector is currently expanding its capacity, and by 2022, the total number of renewable energy projects reached 1,363, with an additional 11 projects under construction. The U.S. market is gradually becoming more competitive, with approximately 40% of renewable energy projects involving large-scale solar, and an additional 215 projects focused on wind energy.

The utility-scale solar energy market is expected to dominate the renewable energy landscape by 2024, leading to a substantial share of 46.6% of the total market. This is due to the increasing demand for clean energy and the transition towards more sustainable energy sources.

According to Fluence, a leading energy storage company, the first quarter of 2025 is projected to show revenue between $36 billion and $44 billion. The anticipated revenue growth is driven largely by increased demand for energy storage solutions, reflecting a significant upward trend in the energy sector.

Fluence is also working on developing new energy storage models to cater to the growing market, aiming to provide “100% non-Chinese manufactured products.” The company plans to introduce these new energy storage models to enhance its capacity for solar energy production.

Additionally, Fluence is expected to significantly contribute to the renewable energy supply chain by 2026, with a projected increase in production capacity by 25% in the coming years. This will play a crucial role in meeting the increasing energy demands across various sectors.

In summary, as the U.S. energy market continues to evolve, the emphasis on renewable energy sources, particularly solar and storage technologies, is expected to intensify, with substantial investments and innovations driving the industry forward.