Battery Storage in the United 

States: An Update on Market 

Trends

August 2021

Independent Statistics & Analysis

www.eia.gov

U.S. Department of Energy

Washington, DC 20585
U.S. Energy Information Administration | U.S. Battery Storage Market Trends i

This report was prepared by the U.S. Energy Information Administration (EIA), the statistical and 

analytical agency within the U.S. Department of Energy. By law, EIA’s data, analyses, and forecasts are 

independent of approval by any other officer or employee of the United States Government. The views 

in this report therefore should not be construed as representing those of the U.S. Department of Energy 

or other federal agencies.
U.S. Energy Information Administration | U.S. Battery Storage Market Trends ii

List of Acronyms 

AEO Annual Energy Outlook

AK/HI Alaska and Hawaii

CAES Compressed-air energy storage

CAISO California Independent System Operator

CPUC California Public Utility Commission

CSP Concentrated solar power

DOE U.S. Department of Energy

EIA U.S. Energy Information Administration

ERCOT Electric Reliability Council of Texas

FERC Federal Energy Regulatory Commission 

GW Gigawatt

IOU Investor-owned utilities

ITC Investment Tax Credit

IPP Independent power producer

IRP Integrated resource plan

ISO Independent System Operator

ISO-NE Independent System Operator of New England

kW Kilowatt

kWh Kilowatthour

LADWP Los Angeles Department of Water and Power

MISO Midcontinent Independent System Operator

MW Megawatt

MWh Megawatthour

NEMS National Energy Modeling System

NYISO New York Independent System Operator

PGE Pacific Gas and Electric

PJM PJM Interconnection

PPA Power purchase agreement

RTO Regional Transmission Organization

SCE Southern California Edison

SDGE San Diego Gas and Electric

SGIP Self-Generation Incentive Program

SMUD Sacramento Municipal Utility District

SPP Southwest Power Pool
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Table of Contents

List of Acronyms............................................................................................................................................ ii

List of Figures............................................................................................................................................... iv

List of Tables ................................................................................................................................................ iv

Executive Summary.......................................................................................................................................1

Large-Scale Battery Storage Trends..............................................................................................................5

Regional trends........................................................................................................................................5

Ownership trends....................................................................................................................................9

Chemistry Trends...................................................................................................................................10

Current Applications...................................................................................................................................13

Application descriptions........................................................................................................................13

Applications by region ...........................................................................................................................14

Battery Storage Costs..................................................................................................................................16

Cost background....................................................................................................................................16

Cost results ............................................................................................................................................17

Battery Utilization Trends...........................................................................................................................20

Small-Scale Energy Storage Trends.............................................................................................................22

Small-scale storage trends in California ................................................................................................22

Small-scale energy storage trends in the rest of the United States......................................................23

Market and Policy Drivers...........................................................................................................................24

Wholesale market rules.........................................................................................................................24

Federal-level policy actions ...................................................................................................................25

State-level policy actions.......................................................................................................................25

Ongoing Trends...........................................................................................................................................28

Near-term planned capacity additions (2020–2023).............................................................................28

Co-located battery storage projects......................................................................................................29

Long-term projected capacity additions (2020–2050) ..........................................................................31

Appendix A: Data Concepts ........................................................................................................................34

Appendix B: Other Storage Technologies...................................................................................................35

Appendix C: Installed Power and Energy Capacity of Large-Scale Batteries by State ................................37
U.S. Energy Information Administration | U.S. Battery Storage Market Trends iv

List of Figures

Figure 1. Large-scale power and energy capacity by region (2019) .............................................................6

Figure 2. Large-scale battery storage installations by region (2019)............................................................7

Figure 3. Large-scale battery storage capacity by region (2010–2019)........................................................8

Figure 4. Power capacity and duration of large-scale battery storage by region (2019) .............................9

Figure 5. Large-scale battery storage capacity by region and ownership type (2019)...............................10

Figure 6. Large-scale battery storage capacity by chemistry (2003–2019) ................................................11

Figure 7. Applications served by large-scale battery storage (2019)..........................................................14

Figure 8. Total installed cost of large-scale battery storage systems by duration (2013–2019)................17

Figure 9. Total installed cost of large-scale battery storage systems by year............................................18

Figure 10. Large-scale battery storage gross generation and usage factor by region (2019) ....................20

Figure 11. Small-scale energy storage capacity by sector (2019) ..............................................................22

Figure 12. Small-scale energy storage capacity outside of California by sector (2019) .............................23

Figure 13. Large-scale battery storage cumulative power capacity, 2015–2023 .......................................28

Figure 14. Large-scale battery storage power capacity by region and co-located generator, operating and 

planned .......................................................................................................................................................29

Figure 15. U.S. large-scale battery storage power capacity, standalone and co-located...........................30

Figure 16. Large-scale co-located battery storage and generator power capacity by region ....................31

Figure 17. AEO2021 diurnal energy storage capacity by case ....................................................................32

Figure 18. AEO2021 power generation by technology and case, 2050......................................................33

Figure 19. Hydroelectric pumped storage capacity (1960–2019)...............................................................35

List of Tables

Table 1. Sample characteristics of capital cost estimates for large-scale battery storage by duration 

(2013–2019)................................................................................................................................................16

Table 2. Sample characteristics of capital cost estimates for large-scale battery storage by year............18
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 1

Executive Summary

Electric power markets in the United States are undergoing significant structural change that we believe, 

based on planning data we collect, will result in the installation of the ability of large-scale battery 

storage to contribute 10,000 megawatts to the grid between 2021 and 2023—10 times the capacity in 

2019. 

Energy storage plays a pivotal role in enabling power grids to function with more flexibility and 

resilience. In this report, we provide data on trends in battery storage capacity installations in the United 

States through 2019, including information on installation size, type, location, applications, costs, and 

market and policy drivers. The report then briefly describes other types of energy storage.

This report focuses on data from EIA survey respondents and does not attempt to provide rigorous 

economic or scenario analysis of the reasons for, or impacts of, the growth in large-scale battery 

storage.

Growth across U.S. electric power market regions

The number and total capacity of large-scale battery storage systems continue to grow in the United 

States, and regional patterns strongly influence the nation-wide market structure:

 At the end of 2019, 163 large-scale battery storage systems were operating in the United States, 

a 28% increase from 2018. The maximum energy that could be stored at these sites (energy 

capacity) was 1,688 megawatthours (MWh), and the maximum power that could be provided to 

the grid from these sites at any given moment (power capacity) was 1,022 megawatts (MW). 

 As of the end of 2019, more than 60% of the large-scale battery system capacity to store energy 

or provide power to the grid in the United States was located in areas covered by regional grid 

operators PJM Interconnection (PJM) and California Independent System Operator (CAISO). 

Historically, these areas attracted capacity additions because of favorable market rules 

promoting energy storage.

 Starting in 2017, regions outside of PJM and CAISO have also seen installations of large-scale 

battery energy storage systems, in part as a result of declining costs. 

 A breakout of installed power and energy capacity of large-scale battery by state is attached as 

Appendix C.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 2

Figure ES1. Large-scale battery storage capacity by region (2010–2019)

power capacity energy capacity

megawatts megawatthours

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Small-scale battery storage

Small-scale battery storage also continues to grow, especially in California, but also in other regions of 

the United States:

 In 2019, 402 MW of small-scale total battery storage power capacity existed in the United 

States.

 California accounts for 83% of all small-scale battery storage power capacity.

 The states with the most small-scale power capacity outside of California include Hawaii, 

Vermont, and Texas.

Lower installed costs 

The costs of installing and operating large-scale battery storage systems in the United States have 

declined in recent years.

 Average battery energy storage capital costs in 2019 were $589 per kilowatthour (kWh), and

battery storage costs fell by 72% between 2015 and 2019, a 27% per year rate of decline. 

 These lower costs support more capacity to store energy at each storage facility, which can 

increase the duration that each battery system can last when operating at its maximum power.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 3

power capacity costs energy capacity costs

dollars per kilowatt dollars per kilowatthour

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

More direct support from solar power

Most large-scale battery energy storage systems we expect to come online in the United States over the 

next three years are to be built at power plants that also produce electricity from solar photovoltaics, a 

change in trend from recent years.

 As of December 2020, the majority of U.S. large-scale battery storage systems were built as 

standalone facilities, meaning they were not located at sites that generate power from natural 

resources. Only 38% of the total capacity to generate power from large-scale battery storage 

sites was co-located with other generators: 30% was co-located specifically with generation 

from renewable resources, such as wind or solar PV, and 8% was co-located with fossil fuel 

generators.

 We expect the relationship between solar energy and battery storage to change in the United 

States over the next three years because most planned upcoming projects will be co-located 

with generation, in particular with solar facilities. If all currently announced projects from 2021

to 2023 become operational, then the share of U.S. battery storage that is co-located with 

generation would increase from 30% to 60%.

Figure ES2. Total installed cost of large-scale battery storage systems by year
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Figure ES3. U.S. large-scale battery storage power capacity additions, standalone and co-located

megawatts

Source: U.S. Energy Information Administration, Dec 2020 Form EIA-860M, Preliminary Monthly Electric Generator Inventory

Note: Solid yellow, green, and brown bars indicate generating total capacity of solar, wind, and fossil fuels that have battery 

storage on-site.

Additional accelerated growth 

Based on planning data we collect, an additional 10,000 megawatts of large-scale battery storage’s

ability to contribute electricity to the grid is likely to be installed between 2021 and 2023 in the United 

States—10 times the total amount of maximum generation capacity by all systems in 2019.

Almost one-third of U.S. large-scale battery storage additions will come from states outside of regional 

grid operators PJM and CAISO, which led in initial development of large-scale battery capacity.

Figure ES4. Large-scale battery storage cumulative power capacity, 2015–2023

power capacity

megawatts

Source: U.S. Energy Information Administration, Dec 2020 Form EIA-860M, Preliminary Monthly Electric Generator Inventory
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 5

Large-Scale Battery Storage Trends

The first large-scale1 battery storage installation reported to us in the United States that was still in 

operation in 2019 entered service in 2003. Only 50 MW of power capacity from large-scale battery 

storage systems was installed between 2003 and 2010. However, the prevalence of these systems has 

grown in recent years. Between 2010 and 2019, power capacity from large-scale battery storage 

increased by a net of 972 MW, and 1,022 MW of battery storage power capacity was operational by the 

end of 2019.

Before last year, the largest annual battery power capacity addition in the United States occurred in 

2018, when a record 222 MW of large-scale battery storage was added. In 2019, 152 MW of battery 

power capacity was installed, 32% less than in 2018. Preliminary data for 2020 show a 458 MW increase 

in battery power capacity, more than double the previous record and 66% more than total power 

capacity additions for 2019. 

Independent power producers (IPPs) installed most of the U.S. battery storage power capacity that was 

operational in 2019 in the PJM Interconnection (PJM), which coordinates the movement of electricity 

through all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North 

Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. Investorowned utilities (IOUs) in the California Independent System Operator (CAISO) territory have procured 

significant amounts of storage capacity as well. 

Although Alaska and Hawaii represent a significant share of current U.S. battery storage capacity, their 

utilization patterns are unique in that batteries need to provide a wider range of additional services and 

engineering support than is commonly used in the Lower 48 states; therefore, these two states are 

grouped together in this report. 

Regional trends

About 74% of large-scale battery storage power capacity and 72% of energy capacity in the United 

States is installed in areas covered by independent system operators (ISOs) or regional transmission 

organizations (RTOs) (Figure 1).

2 The ISOs and RTOs account for 58% of total grid capacity in the United 

States and have the largest shares of storage power capacity relative to their shares of installed grid 

capacity (Figure 2). The disproportionate share of battery storage across ISOs and RTOs may result from 

differences in market design and policies compared to the utilities that integrate generation and 

distribution themselves which prevail elsewhere (Market and Policy Drivers).

 

1 Large-scale refers to systems that are grid connected and have a nameplate power capacity greater than 1 MW.

2

ISOs and RTOs are independent, federally regulated non-profit organizations that ensure reliability and optimize supply and 

demand bids for wholesale electric power. 
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Figure 1. Large-scale power and energy capacity by region (2019)

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 7

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Note: Energy capacity data for large-scale battery storage installed in 2019. Gray regions are not covered by RTO/ISO’s.

PJM

302 MW

ISO-NE

62 MW

AK/HI

199 MWh

power capacity 

megawatts

(MW)

40 MW

1 MW

Figure 2. Large-scale battery storage installations by region (2019)

energy capacity

megawatthours

(MWh)

CAISO

617 MWh

ISO-NE

145 MWh

PJM

190 MWh

120 MWh

1 MWh

NYISO

94 MWh

MISO

73 MWh

ERCOT

106 MWh

CAISO

199 MW

MISO

45 MW

NYISO

33 MW

AK/HI

108 MW

ERCOT

114 MW

Southeast

25 MW

SPP

15 MW

SPP

30 MWh

Southeast

68 MWh

 

West

138 MWh

West

66 MW
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Between 2003 and 2019, 1,044 MW (22 MW of which is now retired) of large-scale battery storage 

power capacity (as part of 168 individual projects) was installed in the United States, 82% of which was 

installed between 2015 and 2019. The region with the most power capacity, PJM Interconnection

(Figure 3), makes up 30% of existing large-scale battery storage power capacity, most of which was built 

from 2014 to 2016. This period of growth in large-scale battery storage power capacity in PJM most 

likely resulted from changes in PJM’s market for frequency regulation (a grid service that helps balance 

momentary differences between electricity demand and supply within the transmission grid) in 2012,

which created a specific requirement for fast-response resources, such as batteries. In 2015, PJM 

capped the market share for fast-responding resources as a result of grid reliability concerns,3 and PJM 

has had relatively less storage growth since these changes occurred.

Existing installations in PJM tend to be power-oriented with larger capacities but shorter durations to 

serve frequency regulation applications. In 2019, large-scale battery storage installations in PJM had an 

average power capacity of 10.8 MW, an average energy capacity of 6.8 MWh, and an average duration 

of 45 minutes. This average duration is the same as the average duration was in 2017 and 2018 for PJM.

Figure 3. Large-scale battery storage capacity by region (2010–2019)

power capacity energy capacity

megawatts megawatthours

 

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

In 2019, installations in CAISO accounted for 20% of existing large-scale battery storage power capacity 

in the United States, but they accounted for 36% of existing energy capacity. California uses battery 

storage for reliability purposes, so large-scale battery storage installations tend to be energy-oriented 

with small power capacities and long durations. 

In 2019, operating large-scale battery storage systems in CAISO had an average power capacity of 4.7 

MW, an average energy capacity of 14.4 MWh, and an average duration of 4.0 hours. This duration is 

longer than the 2018 average of 3.5 hours for battery systems in CAISO and the 2019 national average of 

 

3 FERC Docket No. ER19-1651-000, PJM Interconnection ORDER ON CONTESTED SETTLEMENT, 

https://www.pjm.com/-/media/documents/ferc/orders/2020/20200326-er19-1651-000.ashx
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2.3 hours for all operating large-scale batteries. Other markets show a mix of power- and energyoriented battery installations (Figure 4). The California Public Utilities Commission (CPUC) requires 

generation resources to provide at least four hours of output to contribute to reliability reserves. As a 

result, large-scale battery storage installations in California tend to need larger energy capacities to 

qualify as reliability resources. The Market and Policy Drivers section provides more information on 

California’s activities related to energy storage.

Figure 4. Power capacity and duration of large-scale battery storage by region (2019)

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Note: We calculate duration by dividing nameplate energy capacity (in megawatthours [MWh]) by nameplate power capacity

(in megawatts [MW]). 

Ownership trends

At the end of 2019, IPPs owned slightly more than half (56%) of the existing power capacity of largescale battery storage in the United States, and IOUs owned only 20% (Figure 5). In terms of large-scale 

battery storage energy capacity, IPPs owned 38%, and IOUs owned 36%. This ownership structure

reflects the dominance of IPPs in PJM and PJM’s power-oriented storage applications. It also reflects the 

prevalence of IOU ownership of energy-oriented reliability assets in CAISO.

The differences in ownership resulted from market and state policy incentives pursued in both areas. 

Initially, PJM had rules that compensated batteries that participated in its market region, but later

redacted these rules. California passed state laws that required utilities to accept project bids and install 

a certain amount of batteries on their systems. These requirements led to more battery ownership in 

CAISO by IOUs and not IPPs. PJM took a market approach, while CAISO reflected the policy of the state

in which it operates. 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 10

Figure 5. Large-scale battery storage capacity by region and ownership type (2019)

power capacity energy capacity

megawatts megawatthours

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Although half of all large-scale battery storage power capacity operates inside of PJM and CAISO, some 

noteworthy points emerge in other regions. IPPs own more than 87% of the power capacity in the 

Electric Reliability Council of Texas (ERCOT), which is regulated by the Public Utility Commission of Texas. 

Of the 45 MW of battery storage power capacity in Midcontinent Independent System Operator (MISO),

IOUs own 67%. In Alaska, IPPs own most large-scale battery storage energy capacity, but the power 

capacity is split between cooperatives and IPPs. State-owned utilities in the United States own 8.5% of 

large-scale battery storage power capacity, led by two large installations in Southern California that are

owned by the Imperial Irrigation District (30 MW power capacity/20 MWh energy capacity) and the Los 

Angeles Department of Water and Power (LADWP) (20 MW power capacity/10 MWh energy capacity).

Chemistry Trends

Chemistry descriptions

Battery storage technologies use several different battery chemistries. The most common with largescale deployment4,5,6

in the United States include: 

 Lithium-ion technology was used in more than 90% of the installed power and energy capacity 

of large-scale battery storage operating in the United States at the end of 2019. Lithium-ion 

batteries have high-cycle efficiency (they don’t lose much energy between recharge and 

discharge) and fast response times. In addition, their high energy density (stored energy per unit 

of weight) makes them the current battery of choice for most portable electronic and electric 

vehicle applications.

 Nickel-based batteries were used in some of the earliest large-scale battery storage installations

in the United States, including a 2003 system added in Fairbanks, Alaska. Since then, the 

deployment of this battery chemistry has been limited. Nickel-based batteries typically have 

 

4 Akhil, Abbas A., et al. DOE/EPRI Electricity Storage Handbook in Collaboration with NRECA. January 2015. 

http://www.sandia.gov/ess/publications/SAND2015-1002.pdf

5 Chen, Haisheng, et al. Progress in electrical energy storage system: A critical review. Progress in Natural Science, March 2009.

6 Luo, Xing, et al. Overview of current development in electrical energy storage technologies and the application potential in 

power system operation. Applied Energy, January 2015.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 11

high energy density and reliability but a relatively short cycle life (fewer recharge and discharge 

cycles before performance degrades below useful levels).

 Sodium-based battery storage was used in 2% of the installed large-scale power capacity and 

4% of the installed large-scale energy capacity in the United States at the end of 2019. Sodiumbased battery storage is an established technology based on abundant materials with a long 

cycle life suitable for long-discharge applications. These systems require high operating 

temperatures (about 300°C) because they use molten sodium to operate. 

 Lead acid is one of the oldest forms of battery storage and was developed in the mid-1800s. It is

widely used as a starter battery in vehicles. Lead acid accounted for less than 1% of large-scale 

battery storage power capacity installed at the end of 2019 in the United States and has seen

limited large-scale deployment because of relatively low energy density and a short cycle life. 

 Flow battery systems have one or more chemical components that dissolve in a liquid solution. 

The chemical solutions are typically stored in tanks and separated by a membrane. Tank size 

determines the overall battery capacity, and these systems can be expanded to meet different 

applications. They have a long cycle life and a long operational lifetime. At the end of 2019, flow 

batteries were used in 1% of the installed power and energy capacity of large-scale battery 

storage in the United States. 

Chemistry trends

The earliest large-scale battery storage installations in the United States used nickel-based and sodiumbased chemistries (Figure 6). However, since 2011, most installations have opted for lithium-ion 

batteries, including retrofits of older systems that initially relied on different chemistries. For example, 

in 2012, Duke Energy added 36 MW of lead-acid battery storage to its Notrees wind power facility in 

West Texas. When the lead-acid batteries were first installed, the battery system participated in the 

region’s frequency regulation market, which required rapid charging and discharging that significantly 

degraded the batteries. In 2016, Duke Energy replaced the original lead-acid batteries with betterperforming lithium-ion batteries.7

Figure 6. Large-scale battery storage capacity by chemistry (2003–2019)

power capacity energy capacity

megawatts megawatthours 

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

 

7 Duke Energy, Duke Energy to upgrade its Notrees Energy Storage System, June 2015, https://news.dukeenergy.com/releases/duke-energy-to-upgrade-its-notrees-energy-storage-system

lithium-ion 

nickel-based

sodium-based 

flow

other
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 12

Flow batteries are an emerging energy storage technology. In 2016, Avista Utilities installed the first 

large-scale flow battery storage system in the United States, which is located in Washington State. 

Electric utilities in Washington and California each installed flow battery projects in 2017. The vanadiumbased electrolyte used in these flow battery systems is stored in large tanks and pumped through a 

connected but separate electrode system. This configuration provides greater energy capacity at a lower

price, but it lowers the round-trip efficiency8 of the stored electricity as a result of the energy consumed 

to operate the pumps.

9 Other battery storage chemistries and technologies are in different phases of 

development but have yet to have significant deployment in large-scale grid applications in the United 

States. 

 

8 Round-trip efficiency is the battery system efficiency over one cycle, measured as the amount of energy discharged to a 

specified depth over the amount of energy consumed to bring the system back up to its specified initial state of charge.

9 Amerseco, Inc., Demonstrating the Benefits of Long-Duration, Low-Cost Flow Battery Storage in a Renewable Microgrid, 

December 2019, https://www.serdp-estcp.org/Program-Areas/Installation-Energy-and-Water/Energy/Microgrids-andStorage/EW19-5312
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 13

Current Applications

Batteries have both physical and operational constraints, such as power output and discharge duration. 

These constraints affect individual battery technology choices that are often made to optimize the 

delivery of certain types of services or provide specific applications to the electricity grid. In some cases, 

different applications can, or sometimes must, be combined to maximize the value of the system. For a 

more complete discussion, refer to DNV-GL’s Recommended Practices: Safety, operation and 

performance of grid-connected energy storage systems.

Application descriptions

The various types of battery applications10 include:

 Frequency regulation helps balance momentary differences between electricity demand and 

supply within the transmission grid, often in order to help maintain interconnection frequencies

close to 60 hertz.

 Spinning reserve is the unused but dispatchable generating capacity of online assets that 

provides grid frequency management and may be available to use during a significant frequency 

disturbance, such as during an unexpected loss of generation capacity. This reserve ensures 

undisrupted system operation and power availability. Dispatchable generators are those that 

can be turned on or off to meet immediate needs of the system.

 Voltage or reactive power support ensures the quality of delivered power by maintaining the 

local voltage within specified limits by serving as a source, or sink, of reactive power (the portion 

of electricity that establishes and sustains the electric and magnetic fields of alternating-current 

equipment).

 Load following supplies (discharges) or absorbs (charges) power to compensate for load 

variations—this application is a power balancing application, also known as a form of ramp rate 

control.

 System peak shaving reduces or defers the need to build new central generation capacity or 

purchase capacity in the wholesale electricity market, often during times of peak demand.

 Arbitrage occurs when batteries charge during periods when electrical energy is less expensive 

and discharge when prices for electricity are high, also referred to as electrical energy time-shift.

 Load management provides a demand-side customer-related service. Load management 

services include managing power quality, power reliability (grid-connected or microgrid 

operation), retail electrical energy time-shift, demand charge management, and renewable 

power consumption maximization. Renewable power consumption maximization refers to 

charging the battery storage system during periods when renewable energy is greatest to 

consume the maximum renewable energy from the battery system, or in other words, charging 

with solar during the day or charging with wind during high wind periods.

 Storing excess wind and solar generation reduces the rate of change for power output from a 

non-dispatchable generator to maintain compliance with local grid requirements related to grid 

stability or to prevent over production or over-production penalties. Non-dispatchable 

generators cannot be turned on or off to meet immediate needs and are often intermittent 

 

10 DNV-GL, Recommended Practices: Safety, operation and performance of grid-connected energy storage systems, September 

2017, https://rules.dnvgl.com/docs/pdf/DNVGL/RP/2017-09/DNVGL-RP-0043.pdf?_ga=2.80787476.2095102769.1516371272-

888917498.1516371272
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 14

resources (generators with output controlled by the natural variability of the energy source, for 

example, wind and solar).

 Backup power, following a catastrophic failure of a grid, provides an active reserve of power 

and energy that can energize transmission and distribution lines, provide start-up power for 

generators, or provide a reference frequency. 

 Transmission and distribution deferral keeps the loading of the transmission or distribution 

system equipment below a specified maximum. This application allows for delays in 

transmission upgrades, avoids the need to upgrade a transmission system completely, or avoids 

congestion-related costs and charges.

 Co-located generator firming provides constant output power over a certain period of time for 

a combined generator and energy storage system. Often the generator in this case is for nondispatchable renewable generation (for example, wind or solar). 

Applications by region

Each year, operators report on Form EIA-860 all use case applications that their batteries can serve. A 

battery’s number and types of uses varies significantly across regions (Figure 7). For example, battery 

storage in PJM is primarily for one application (frequency regulation). In contrast, batteries installed in 

CAISO are used for several reasons (2.5 applications on average) but primarily provide system peak 

shaving and load management. MISO has a widely dispersed set of use cases, and almost the same 

number of batteries provide peak shaving as do frequency regulation. Batteries in ISO New England (ISONE), like those in CAISO, primarily provide peak shaving and store excess wind and solar generation, but 

New England batteries also significantly support frequency regulation. 

Figure 7. Applications served by large-scale battery storage (2019)

 power capacity energy capacity

 megawatts megawatthours

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Note: This figure is based on information provided by Form EIA-860 survey respondents regarding their market region and the 

applications that battery storage systems provided in 2019. Survey respondents could select more than one application for each 

battery system.

Different factors affect battery storage investment decisions in different regions. These factors depend 

on state policies and both existing and future market characteristics and needs. Batteries that are 

intended primarily to serve frequency response have different design characteristics than those 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 15

intended to serve peak shaving. However, because most batteries serve more than one function, most 

of the RTO markets and regions have batteries that serve all the use case applications despite regional 

or market bias. 

Batteries installed in Alaska and Hawaii are used more diversely (4.3 applications on average). Because 

these states lack interconnected operating systems, batteries need to provide a wider range of 

additional services and engineering support than commonly needed in the Lower 48 states. 

Figure 7 illustrates the total amount of power and energy capacity that was available for each 

application in the United States in 2019. Nearly 73% of large-scale battery storage power capacity 

provided frequency regulation, which helps electrical grids quickly balance unexpected differences in 

electricity supply and demand. Installations in PJM are driven by the need for fast-ramping frequency 

regulation, a need that has led many independent power producers to rapidly deploy large-scale battery 

storage. As of 2019, CAISO installations served a wider array of applications than PJM applications

because regulated utilities in CAISO systems served multiple applications without necessarily being 

directly compensated for each application through market mechanisms.

 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 16

Battery Storage Costs 

Costs for battery storage technologies depend on technical characteristics such as the power capacity 

and energy capacity of the battery system. 

Cost background

This discussion of costs is divided into three main categories based on the nameplate duration of the 

battery storage system, which is the ratio of nameplate energy capacity to nameplate power capacity:

 The short-duration battery storage category includes systems with less than 0.5 hours of 

nameplate duration. 

 The medium-duration battery storage category includes systems with nameplate durations 

ranging between 0.5 hours and 2.0 hours. 

 The long-duration battery storage category includes all systems with more than 2.0 hours of 

nameplate duration. 

Table 1 summarizes the average characteristics of the categorized sample data. Battery duration is a key 

determinant of system characteristics such as cost. Even when using the same cells and inverters, a 

system intended to provide long duration discharge will optimize its design to minimize energy cost (in 

dollars per kilowatthour), whereas a system intended to provide a short-duration injection of power into 

the grid will minimize power cost (dollars per kilowatt).

For costs reported between 2013 and 2019, short-duration battery storage systems had an average 

power capacity of 12.4 MW, medium-duration systems had 6.4 MW, and long-duration battery storage 

systems had 4.7 MW. The average energy capacity for the short- and medium-duration battery storage 

systems were 4.7 MWh and 6.6 MWh, respectively. The average for the long-duration battery storage 

systems was 21.2 MWh, between three and five times more than the average energy capacity of shortand medium-duration battery storage systems.

Table 1. Sample characteristics of capital cost estimates for large-scale battery storage by duration

(2013–2019)

ShortdurationMediumdurationLongduration

<0.5 hours 0.5–2 hours >2 hours

Number of battery systems with reported costs available 24 52 45

Average of nameplate power capacity, megawatts 12.4 6.4 4.7

Average of nameplate energy capacity, megawatthours 4.7 6.6 21.2

Average of nameplate duration, hours 0.4 1.2 4.6

Capacity-weighted cost per unit power capacity, 872 1,224 2,575

dollars per kilowatts 

Capacity-weighted cost per unit energy capacity, 2,329 1,178 575

dollars per kilowatthour

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Note: The reported capital cost values are from large-scale battery storage systems installed across the United States between 

2013 and 2019 and include multiple reported battery chemistries.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 17

Cost results 

Based on costs reported between 2013 and 2019, battery systems with shorter durations typically had

lower normalized power capacity costs measured in dollars per kilowatt ($/kW) than batteries with 

longer nameplate durations (Figure 8). The opposite was generally true when examining normalized 

energy capacity costs measured in dollars per kilowatthour ($/kWh) because total system costs for 

longer-duration systems are spread out over more stored energy. Technological and site-specific 

requirements also contribute to the range of normalized cost values, especially within a given duration 

category.

Figure 8. Total installed cost of large-scale battery storage systems by duration (2013–2019)

power capacity cost energy capacity cost

dollars per kilowatt ($/kW) dollars per kilowatthour ($/kWh)

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Normalized energy capacity costs (in dollars per kilowatthour) have decreased over time (Table 2 and

Figure 9). The energy capacity-weighted average installed cost fell by 72% between 2015 and 2019 for 

an average five-year annual decrease of 27%. The capacity-weighted average installed cost of large-scale 

batteries fell by 33% from $2,102/kWh in 2015 to $1,417/kWh in 2016. This trend continued into 2017 

when installed costs decreased by 47% to $755/kWh. This fall in energy capacity costs carried through

2017 and 2019, but at a slower rate, when the capacity-weighted average installed cost fell by 17% to 

$625/kWh in 2018 and by 5.7% to $589/kWh in 2019. 

From 2015 to 2019, power capacity costs have remained relatively stable and within an average cost 

range of $913/kW and $1,664/kW. The trends of declining costs in terms of energy capacity and of 

relatively stable costs in terms of power capacity result from the increasing durations and larger energy 

capacities over time. The average nameplate energy capacity of the batteries in these cost samples

increased at an average annual rate of 16% between 2015 and 2019, while duration increased at an 

annual rate of 56% for that same time period. In contrast, the average nameplate power capacity 

decreased at an average annual rate of 26% between 2015 and 2019.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 18

Table 2. Sample characteristics of capital cost estimates for large-scale battery storage by year

2015 2016 2017 2018 2019

Number of battery systems with reported costs available 10 21 22 26 37

Average of nameplate power capacity, megawatts 12.7 10.4 5.6 7.8 3.8

Average of nameplate energy capacity, megawatthours 5.5 12.2 11.7 16.1 9.8

Average of nameplate duration, hours 0.5 1.5 1.8 2.4 3.2

Capacity-weighted cost per unit power capacity, 913 1,664 1,587 1,300 1,511

dollars per kilowatt

Capacity-weighted cost per unit energy capacity, 2,102 1,417 755 625 589

dollars per kilowatthour

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

power capacity costs energy capacity costs

dollars per kilowatt dollars per kilowatthour

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Note: Cost observations for installation years 2013 and 2014 are not in this figure because the sample sizes for those years are

too small.

Unlike other energy sources, battery storage can supply and consume energy at different times of the 

day, creating a combination of cost and revenue streams that makes it challenging to directly compare 

storage with generation-only technologies. Batteries are not standalone generation sources and must 

procure electricity supplied by generators to recharge and cover the round-trip efficiency losses they 

have during cycles of charging and discharging.

Two major challenges exist in determining the profitability and cost of battery storage systems. First, we

must consider the individual markets in which the storage technology will be used and what revenue 

opportunities exist for the technology. Second, we must consider degradation of the system over time, 

which is the lasting and continuous decrease in either a battery’s power or energy performance, or both,

which is linked to use or age of a battery component or system. 

Figure 9. Total installed cost of large-scale battery storage systems by year
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 19

A battery’s power or energy performance can be characterized by the full-cycle power input and output 

at an agreed-on charge and discharge rate. Two general options can ensure reliable performance during 

a storage system’s lifetime: 

 Overbuilding: adding more storage or discharge capacity behind the inverter than is needed so 

that as the system ages, it will maintain a capacity at or above the contracted capacity required 

of the system. 

 Continual upgrades: replacing some portion of the storage system to maintain the agreed-on 

performance during its lifetime. 

The two approaches to meet performance requirements affect the installed capital costs of the system. 

Overbuilding storage capacity leads to a higher initial installed capital cost, and continual upgrades lead 

to higher operation and maintenance costs throughout the lifetime of the storage facility. Therefore, 

comparing only the normalized capital cost of various battery systems does not capture the variation in 

the lifetime costs (Figure 8). Full understanding of this trade-off between capital and operating costs 

requires additional data collection and analysis as the industry continues to mature and as the operating 

batteries age through their expected long-term maintenance cycles.

 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 20

Battery Utilization Trends

In addition to generator capacity data collected from Form EIA-860, we also collect power discharge and 

charging data from respondents at the power plant level on Form EIA-923, Power Plant Operations 

Report. Battery storage sites absorb electricity from the power grid while charging, and they supply 

electricity to the grid when discharging. Power absorbed by charging a battery can either be a system 

cost or system value (a revenue stream in a power market or simply a value recognized by the system 

operator in a vertically integrated balancing authority). In most cases, value or revenue is always 

produced when supplying electricity from stored energy to the grid.

Because of the efficiency loss between charging and discharging a battery, batteries are a net consumer 

of electricity. Of the 150 plants (1,022 MW) that reported operating battery storage capacity on Form 

EIA-860 in 2019, 109 plants (850 MW) also reported electricity generation and consumption data on

Form EIA-923 in 2019. These 109 plants reported a total of 458,169 MWh of gross discharge and

553,705 MWh of gross charge in 2019 (an average round-trip efficiency of 85%). About half of the 

reported gross discharge was PJM serving its frequency regulation market (Figure 10).

Figure 10. Large-scale battery storage gross generation and usage factor by region (2019)

 gross generation usage factor

 megawatthours percentage

Source: U.S. Energy Information Administration, 2019 Form EIA-923, Power Plant Operations Report

Note: Not all plants with battery storage systems reported generation to EIA in 2019. 

For most electric generators, the capacity factor measures the actual useful output (net generation) of 

the plant (or resource) divided by the maximum potential output of the plant if it were operating at its 

full notional capability (normally the full rated power capacity for 24 hours per day, 365 days a year). 

Energy storage systems can generate revenue, or system value, through both discharging and charging 

of electricity; however, at this time our data do not distinguish between battery charging that generates 

system value or revenue and energy consumption that is simply part of the cost of operating the 

battery. Therefore, the usage factor detailed in Figure 10 is calculated using solely gross discharge. 

However, because of the strong relationship between charge and discharge, in cases where the storage 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 21

unit provides system value or revenue from both charge and discharge, its bi-directional system value

would be linearly related to its usage factor.11

Usage factors using only discharge cannot, however, be directly compared to usage factors for 

generation because batteries can provide value to the grid both when charging and discharging, unlike 

generating units which only provide recognized value when generating. 

In 2019, the average usage factor of the 109 U.S. plants reporting generation to EIA in 2019 was 6%. 

Battery systems in PJM and CAISO were nearly 9%, well above the national average, while systems in 

ERCOT were well below the average at 3%. Systems outside the regions specified in Figure 10, including 

Hawaii, Alaska, and the parts of California not included in CAISO, had an average usage factor of under 

1%.

 

11 Specifically, a battery over any extended period will need to recharge (consume) as much energy as it discharged (generated),

plus additional recharge to compensate for losses. If the usage factor of an 85% efficiency battery is 10%, then its average 

consumption would be 12% of its total capacity over a period of time, and its bi-directional energy flow would be about 22% of 

its total capacity over a period of time. Because a battery must recharge a bit more than it is discharged, its maximum annual 

usage factor is limited to about 43% (for an 85% efficient unit); that is, it can only generate 43% of the electricity that a unit of 

that size could were it able to generate 24 hours per day for 365 day a year.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 22

Small-Scale Energy Storage Trends

Small-scale battery storage is a significant part of developing energy storage in the United States. Smallscale battery storage refers to storage at facilities that have less than 1 MW of generating capacity.

Electric utilities connected to these units report the small-scale storage data to us through Form EIA861. Small-scale storage data differs from the detailed large-scale storage data that battery operators

report. Utilities, through their interconnection data, provide summaries of the total capacity of smallscale storage connected to their systems but do not report detailed performance and design data. 

In 2019, utilities reported 402 MW of existing small-scale storage power capacity in the United States.

About 41% of this capacity was installed in the commercial sector, 41% was installed in the residential 

sector, and 14% was installed in the industrial sector. The remaining 4% was directly connected to the 

distribution grid, such as a utility at its own distribution substation. 

Small-scale storage trends in California

As shown in Figure 11, in 2019, 83% of reported small-scale storage power capacity in the United States 

was in California. Of the small-scale storage power capacity in California, 97% was installed in three 

electric utility service territories: Southern California Edison (SCE), Pacific Gas and Electric (PGE), and San 

Diego Gas and Electric (SDGE). In 2019, most installations of small-scale storage in the commercial sector 

in California were in SCE’s territory (68% of such capacity) and SDGE’s territory (23%). Most installations 

(94%) of small-scale storage in the industrial sector in California were in PGE’s territory.

Source: U.S. Energy Information Administration, Form EIA-861, Annual Electric Power Industry Report

Note: Data collected on small-scale storage may include forms of energy storage other than batteries. Direct-connected storage 

may not be located at an ultimate customer’s site but is in front of the meter or connected directly to a distribution system or 

both. Direct-connected storage in California and industrial storage outside of California account for less than 1% of the total and 

are therefore not depicted in the figure.

Figure 11. Small-scale energy storage capacity by sector (2019)
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 23

California’s large share of small-scale energy storage power capacity can be attributed to the state’s 

Self-Generation Incentive Program (SGIP), which provides financial incentives for installing customersited distributed generation. Installations receiving rebates through SGIP contribute to California’s 2013 

energy storage regulation (Assembly Bill 2514), which requires 200 MW of customer-sited energy 

storage to be installed by 2024. In May 2017, the CPUC implemented Assembly Bill 2868 and ordered

SCE, PGE, and SDGE to procure up to an additional 500 MW of distributed energy storage, including no 

more than 125 MW of customer-sited energy storage.

Small-scale energy storage trends in the rest of the United States

After California, the states with the most reported small-scale storage power capacity in 2019 were

Hawaii, Vermont, and Texas, and much of this capacity was installed in the residential sector (Figure 12). 

Only minimal small-scale storage power capacity in the industrial sector existed outside of California. In 

the commercial sector, small-scale storage was mostly reported in Hawaii and New York, as well as other 

states, notably in Georgia, Illinois, and Utah.

Figure 12. Small-scale energy storage capacity outside of California by sector (2019)

power capacity 

megawatts

Source: U.S. Energy Information Administration, 2019 Form EIA-861, Annual Electric Power Industry Report

End users typically own small-scale energy storage systems. Direct-connected storage systems are 

installations not located at an ultimate customer’s site but rather in front of the meter12 or connected 

directly to a distribution system, or both. In Vermont, Green Mountain Power Corporation reported the 

largest amount of direct-connected battery storage power capacity. Green Mountain operated front-ofthe-meter battery storage systems for customers, which totaled 12.1 MW of power capacity in 2019. 

The second-largest reported direct-connected battery storage power capacity was in Texas, operated by 

the Farmers Electric Cooperative, which totaled 1.85 MW.

 

12 Front of the meter describes systems that provide power from an offsite location where the electricity must travel from the 

system through a meter to reach the home or business.

residential 

commercial 

industrial 

direct 

connected
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 24

Market and Policy Drivers

As discussed earlier in this report, battery storage is technologically capable of serving many 

applications, each with benefits for one or more participants in the electricity system, including 

transmission and distribution system operators, power producers, and consumers. However, the 

functional ability of storage to serve these applications can be limited if regional policies or market rules 

do not acknowledge the value added. Still, market operators and policy makers can be hesitant to draft 

new legislation or market rules for relatively new technologies, such as storage, that may not have 

enough historical data to easily show value added to the system. This situation has begun to change as 

deployment of battery storage has increased and as industry stakeholders in some regions have gained 

experience financing, procuring, and operating storage installations.

Wholesale market rules

ISOs and RTOs are independent, federally regulated, non-profit organizations that ensure reliability and 

optimize supply and demand bids for wholesale electric power. They are currently regulated to be 

technology neutral and must ensure market rules do not unfairly preclude any resources from 

participating (in other words, ensure markets don’t favor existing technologies and preclude new 

technologies from fairly competing for power generation market share), as enforced by the Federal 

Energy Regulatory Commission (FERC). Many existing market rules may not take into account the unique 

operating parameters and physical constraints of battery storage as both a consumer and a producer of 

electricity. However, recent actions by FERC, as well as by ISOs and RTOs, have begun to carve a path for 

storage to participate in individual markets. 

A notable example of this trend is FERC Order 755, issued in 2011, which requires ISO and RTO markets 

to compensate for resources that can provide faster-ramping frequency regulation. As a result of Order 

755, PJM split its frequency regulation market into a fast-ramping service and a slower-ramping service. 

By the end of 2015, more than 180 MW of large-scale battery storage power capacity had come online 

in the PJM territory. 

However, in 2015, PJM began observing operational issues, including over cycling of large power 

generation units such as hydro plants and combustion turbines, which resulted from overdependence 

on the duration limitations of the fast-ramping regulation service. The fast-ramping service mainly 

consists of resources with duration restrictions, such as batteries, as opposed to the slower-ramping 

service, which generally consists of resources that could operate much longer, but take longer to come 

online.13 Therefore, PJM changed its frequency regulation signals to decrease its ratio of fast-ramping to 

slow-ramping resources, delaying installations of large-scale battery storage in the region. 

Other system operators have also implemented relevant changes to market rules. Some have developed

unique asset classes for storage that allow them to be treated differently than other generating 

technologies. System operators then can specify participation models for these new asset classes, 

allowing one facility to serve and generate revenue from several markets. Some operators have lowered

the minimum size requirements, allowing relatively smaller energy storage facilities to generate revenue 

 

13 PJM, Fast Response Regulation (RegD) Resources Operational Impact, July 1, 2017. 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 25

in markets usually reserved for bigger power plants. Some operators have defined duration 

requirements for assets to provide different grid services, allowing energy storage investors to plan 

accordingly. Although these rules spurred energy storage deployment to varying levels in these regions, 

energy storage participation has been inconsistent in each market.

In February 2018, FERC issued Order No. 841, which required system operators to remove barriers for

electric storage resources to participate in the capacity, energy, and ancillary services markets. Each ISO

and RTO under FERC jurisdiction was required to revise its tariff to include market rules that recognize 

the physical and operational characteristics of electric storage resources and to implement the revisions

after FERC approves them. As of March 2021, FERC had approved the changes made by all ISOs and 

RTOs, but several RTOs, including MISO, ISO-NE, and SPP, are still working on implementing the 

approved changes. 

In November 2020, FERC approved Order No. 2222, which requires RTOs and ISOs to create financial 

mechanisms for distributed energy resources (DERs) to compete to provide services normally reserved 

for large-scale systems. DERs are small-scale systems located close to the power load. They are usually 

connected to the distribution network and help to decrease the load on the transmission grid. This 

requirement could allow more economic deployment of small-scale battery storage systems, which 

could potentially be connected through virtual power plants. Grid operators must file compliance filings 

by late 2021, and the resulting rules may take effect in early 2022 or later.

Federal-level policy actions

Other than the FERC activities described in the previous section, federal policies involving energy 

storage have been limited. One exception is the Investment Tax Credit (ITC), which is a credit to income 

tax liability proportional to the capital expenditures originally intended for certain renewable energy 

technologies, including solar and wind. Energy storage installed at a solar or wind facility can be 

considered part of the energy property of the facility and can receive a portion of the tax credit, given 

that at least 75% of the power used to charge the battery comes from the co-located renewable asset. 

State-level policy actions

Most policy actions involving energy storage have been at the state level and include setting 

procurement requirements, establishing incentives, and requiring that storage is incorporated into longterm planning mechanisms.

Policy actions in California

California has introduced several measures related to energy storage. In 2013, the California Public 

Utility Commission (CPUC) implemented Assembly Bill 2514, which requires its investor-owned utilities 

(IOUs) to procure 1,325 MW of differing levels of large-scale and small-scale energy storage by 2020 and 

to have the energy storage operational by 2024. As of December 2020, California had 520 MW of 

operational large-scale battery storage.

In May 2017, CPUC implemented Assembly Bill 2868, which requires IOUs to procure up to an additional 

500 MW of distributed energy storage, including no more than 125 MW of customer-sited energy 

storage. The Self-Generation Incentive Program, which provides financial incentives for installing 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 26

customer-sited distributed generation, has designated $48.5 million in rebates for residential storage 

systems of 10 kW or smaller and $329.5 million for storage systems larger than 10 kW.

Press reports in 2017 indicated that 100 MW, or about 19%, of existing battery storage power capacity 

in California was installed in response to a leak at the Aliso Canyon natural gas storage facility outside of 

Los Angeles in October 2015.14 According to these reports, in May 2016, to help address reliability risks 

resulting from constraints on natural gas supply, the CPUC authorized the SCE electric utility to hold an 

expedited solicitation for energy storage. As a result, 62 MW of battery storage power capacity was 

added to the system in December 2016. In addition, the CPUC expedited SDGE’s ongoing procurement 

of 38 MW of battery storage, which was installed in early 2017.

Policy actions in the rest of the United States

As of May 2021, five states besides California have also set energy storage requirements or targets:

 Oregon: Passed House Bill 2193 in 2015, allowing the two largest utilities in the state, Portland 

General Electric and Pacific Power, to each procure 5 MWh of storage energy capacity by 

January 2020. Although neither utility had achieved the 5 MWh of operational battery storage 

as of December 2020, both announced projects that are scheduled to come online in upcoming 

years, such as the Wheatridge Renewable Energy Facility.

 Massachusetts: Enacted House Bill 4857 (An Act to Advance Clean Energy) in August 2018, 

directing the Massachusetts Department of Energy Resources to set an energy storage target of 

1,000 MWh by 2025. 

 New York: In October 2018, New York announced a target of 3,000 MW of energy storage by 

2030. 

 New Jersey: In May 2018, New Jersey enacted the Clean Energy Act, P.L. 2018, which set a 

target of 2,000 MW of energy storage by 2030.

 Virginia: In February 2020, Virginia passed House Bill 1526, which set a 3,100 MW energy 

storage goal by 2035. 

In addition, some states, such as Nevada, allow storage systems to be included in state-level renewable 

portfolio standards. Aside from targets, some states have provided financial incentives for energy 

storage installations, including grants, support for pilot projects, and tax incentives. For example, in 

2018, Maryland passed Senate Bill 758, offering a tax credit of 30% on the installed costs for residential 

and commercial storage systems.

Many states require utilities to produce integrated resource plans (IRPs) that demonstrate each utility’s 

ability to meet long-term demand projections using a combination of generation, transmission, and 

energy efficiency investments, while minimizing costs. Incorporating storage into IRPs can be a challenge 

because storage is different from conventional electricity generators and demand-side resources. For 

example, storage:

 Has unique operational constraints

 

14 Green Tech Media, “Tesla, Greensmith, AES Deploy Aliso Canyon Battery Storage in Record Time,” January 31, 2017,

https://www.greentechmedia.com/articles/read/aliso-canyon-emergency-batteries-officially-up-and-running-from-teslagreen#gs.bvJdDKY
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 27

 Can be interconnected at various points throughout the system

 Can serve a variety of applications

 Has policy and regulatory uncertainty that may affect system profitability

Nonetheless, some states have begun requiring utilities to include storage in integrated resource plans, 

including:

 Arizona

 California

 Connecticut

 Colorado

 Florida

 Indiana

 Kentucky

 Massachusetts

 New Mexico

 North Carolina

 Oregon

 Utah

 Virginia

 Washington

New York and Vermont already include storage in their state energy plans.

15

 

15 PV Magazine, “Utilities are increasingly planning for energy storage,” December 7, 2017, https://pv-magazineusa.com/2017/12/07/utilities-are-increasingly-planning-for-energy-storage-w-charts/
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 28

Ongoing Trends

In the near term, we assess future battery capacity installation trends using planned additions reported 

by project developers, both for standalone battery storage systems and for those co-located with other 

electricity generating technologies such as solar or wind. For the long term, we provide projections on 

future battery capacity installations in our Annual Energy Outlook. 

Near-term planned capacity additions (2020–2023)

As of December 2020, project developers reported to us that they planned to install over 10 gigawatts 

(GW) of large-scale battery storage power capacity in the United States between 2021 and 2023, which 

would represent more than a 1000% increase from the 1 GW of operating storage power capacity in 

2019. Given the short planning period required to install a storage facility, the reported planned capacity 

does not necessarily reflect all the possible builds during this period, but it can be used to indicate 

trends.

Figure 13. Large-scale battery storage cumulative power capacity, 2015–2023

megawatts

Source: U.S. Energy Information Administration, December 2020 Form EIA-860M, Preliminary Monthly Electric Generator 

Inventory

California accounted for 40% of battery storage power capacity planned for installation between 2021 

and 2023 and reported as of December 2020. These planned additions put California in line to meet its

energy storage requirement (Assembly Bill 2514), which is that IOUs install 1,325 MW of energy storage

by 2024. New York and Massachusetts also have state requirements for energy storage and companies 

have planned battery storage projects in the upcoming years. Virginia and New Jersey have

requirements, but no companies have reported any planned energy storage builds to us. The Market 

and Policy Drivers section has information on this topic. 

Several states without policy requirements show relatively strong growth in large-scale battery storage 

in the upcoming years, including Texas, Arizona, Nevada, New Mexico, Florida, Hawaii, Colorado, and 

Montana. Strong forecasted growth in the Southwest highlights an increase in battery storage in states 

outside of RTO and ISO regions as well. Lower battery costs, in addition to lessons learned from previous 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 29

storage deployment in regions with market rules or state requirements, may have led to increased 

investment of battery storage in the regions new to battery storage.

Figure 14. Large-scale battery storage power capacity by region and co-located generator, operating 

and planned

megawatts

Source: U.S. Energy Information Administration, Dec 2020 Form EIA-860M, Preliminary Monthly Electric Generator Inventory

The four RTO and ISO regions of CAISO, ERCOT, NYISO, and ISO-NE will host 97% of the 3,315 MW of

standalone battery storage power capacity (not located at a power plant with another generating 

resource such as solar or wind) planned to come online between 2021 and 2023. During the same 

period, 2,508 MW of battery storage power capacity outside of the RTO and ISO regions plan to come 

online, the majority of which will be co-located at plants with solar power generators (Figure 14). 

Co-located battery storage projects

Pairing power generating technologies, especially solar, with on-site battery energy storage will be the 

most common trend over the next few years for deploying energy storage, according to projects 

announced to come online from 2021 to 2023. Between 2011 and 2020, 92 power plants with colocated battery storage systems came online with a combined power capacity of 628 MW. Data 

reported for proposed projects show an additional 7,689 MW (100 plants) with co-located battery 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 30

storage systems are planned to come online between 2021 and 2023, compared with 3,115 MW of 

standalone storage (59 plants).

Figure 15. U.S. large-scale battery storage power capacity, standalone and co-located

megawatts

Source: U.S. Energy Information Administration, Dec 2020 Form EIA-860M, Preliminary Monthly Electric Generator Inventory

Note: Solid yellow, green, and brown bars indicate total generating capacity of solar, wind, and fossil fuels that have battery 

storage co-located on-site.

These co-located projects offer an arbitrage application, which allows common on-site infrastructure to 

store renewable-generated energy produced during periods of low electricity prices and low demand. 

The infrastructure later supplies stored energy to the grid when both demand and electricity prices are 

higher. Solar generators can particularly benefit from battery storage because of their relatively 

predictable generation patterns. 

The benefits of pairing battery storage with any generator can also be realized even after the power 

plant has initially begun operating. As of December 2020, more than 25 power plants had added battery 

storage systems after their original operation date. Another key advantage of pairing batteries with 

renewable generators is the ability to take advantage of tax incentives such as the Investment Tax Credit 

(ITC), which is common in solar projects.

As of December 2020, about 50% of operating co-located battery storage power capacity was paired

with wind turbines, and the rest was split between solar and fossil fuel generation (Figure 15). This trend 

is set to change significantly; 80% of co-located battery storage power capacity that is planned to come 

online between 2021 and 2023 will be paired with solar. Over 75% of this planned battery storage 

power capacity co-located with solar comes from the CAISO and the Southwest (Arizona, New Mexico, 

and Nevada) regions. Nearly 25% of all planned solar photovoltaic (PV) capacity will include co-located 

storage, compared with under 2% of existing solar PV capacity as of December 2020. 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 31

The ratio of battery storage to co-located resource power capacity is scheduled to significantly increase 

over the next few years. On average, existing co-located projects have a 1:10 battery storage power 

capacity to co-located generator capacity on a power rating basis, while planned projects have a ratio of 

1:2. Projects paired with fossil fuel on-site, such as those in NYISO, MISO, and ISO-NE, have a smaller 

ratio than those paired with solar, such as those in CAISO, ERCOT, Arizona, and Nevada (Figure 16).

Figure 16. Large-scale co-located battery storage and generator power capacity by region

megawatts

Source: U.S. Energy Information Administration, Dec 2020 Form EIA-860M, Preliminary Monthly Electric Generator Inventory

Long-term projected capacity additions (2020–2050)

In the Annual Energy Outlook 2021 (AEO2021), we provide projections to 2050 on the supply and 

demand needs for energy markets in the United States. The AEO2021 Reference case, which assumes 

implementation of current U.S. laws and policies, projects large-scale battery storage energy capacity to 

grow to 235 GWh (59 GW power capacity of four-hour duration systems) in 2050 (Figure 17), including 

82 GWh (21 GW) of standalone storage and 153 GWh (38 GW) of storage paired with solar PV.

16

AEO2021 includes alternative scenarios (cases) that examine the sensitivity of results to changes in the 

costs of renewables and the availability of oil and natural gas resources. All cases have a projected 

baseline total of 64 GWh of battery storage from historical builds, announced projects, and state policy 

 

16AEO projections assume all battery storage capacity defined as co-located with PV will charge solely from its on-site PV 

generation through a DC coupled system.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 32

requirements. Our National Energy Modeling System (NEMS) determines how much additional storage 

to add to a case, based on the input assumptions for each case in order to minimize costs of meeting 

U.S. power demand through 2050.

In our AEO2021 forecast, co-located storage was added to the model for the first time. Figure 17 shows 

the distribution of standalone storage versus co-located storage across different AEO2021 cases. When 

renewable and storage costs were lowered, the model preferred to add additional co-located storage 

compared with the Reference case. When natural gas prices were raised, the model preferred to add

standalone storage.

Figure 17. AEO2021 diurnal energy storage capacity by case

energy capacity

gigawatthours

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021

In the AEO2021 Low Oil and Gas Supply case, which has higher natural gas prices compared with the 

Reference case, natural gas combined-cycle generation declines more than in the Reference case and is 

replaced by coal, nuclear, solar, and wind generation (Figure 18). To support this generation mix, an 

additional 270 GWh of standalone storage is built compared with the Reference case. Co-located 

storage deployment is the same as the Reference case, adding to the 504 GWh of battery storage 

operating in 2050.

In the AEO2021 Low Renewables Cost case, our added assumption of a 40% reduction in renewables 

and energy storage costs compared with the Reference case results in solar and wind generation 

replacing coal, nuclear, and natural gas combined-cycle generation in the Low Renewables Cost case. 

Similar to in the Low Oil and Gas Supply case, about 270 GWh of standalone storage is added in the Low 

Renewables Cost case compared with the Reference case; however, over 150 GWh of co-located energy 

storage energy capacity is also added for a total of 670 GWh diurnal storage operating in 2050.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 33

Figure 18. AEO2021 power generation by technology and case, 2050

billion kilowatthours

Source: U.S. Energy Information Administration, Annual Energy Outlook 2021

Modeling diurnal (daily cycling) energy storage systems requires high fidelity models that use high 

temporal and geographic resolution to capture the value of these systems. Because long-term planning 

models are designed to deliver multi-decade results with many complex interactions, modelers often 

have to simplify their modeling of energy storage technologies to avoid excessive processing times. One 

simplification we made that had significant consequences for energy storage technologies in AEO2021 is 

the temporal resolution of the NEMS model. Our AEO2021 included energy storage as a four-hour 

battery system that can avoid curtailments of excess solar- and wind-generated electricity, shift energy 

within a day, and help meet regional reliability requirements. However, modeling sub-hourly markets, 

such as battery systems participating in frequency response, remains a challenge. As a result, our AEO 

projections, as shown, do not represent all of the available storage technology options nor the full suite 

of applications that storage can serve. The list of possible applications for storage is outlined in the 

Current Applications section of this report.

We have been collaborating with other modeling entities on a multi-model comparison17 to enhance the 

representation of technologies that challenge conventional long-term planning model design, such as 

wind, solar, and energy storage. Battery storage in the AEO will continue to develop as the markets and 

applications for energy storage evolve.

 

17 Cole, Wesley, et al, Variable Renewable Energy in Long-Term Planning Models: A Multi-Model Perspective, November 2017,

https://www.energy.gov/eere/analysis/downloads/variable-renewable-energy-long-term-planning-models-multi-modelperspective.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 34

Appendix A: Data Concepts

Electrical, thermal, mechanical, and electrochemical technologies can store energy. This report focuses 

on electrochemical battery storage technologies, but Appendix B: Other Storage Technologies addresses 

other energy storage technologies. 

We measure the capacity of battery storage in two ways: power capacity and energy capacity. Electrical 

generating technologies are often characterized in terms of power capacity, which is the maximum 

amount of power output possible at any instant, measured in this report in standard units of electrical 

power such as kilowatts (kW), megawatts (MW), or gigawatts (GW). However, batteries can sustain 

power output for only so long before they need to recharge. The duration of a battery is the length of 

time that a battery storage system can sustain power output at its maximum discharge rate, typically 

expressed in hours. The energy capacity of the battery storage system is defined as the total amount of 

energy that can be stored or discharged by the battery storage system and is measured in this report in 

standard units of electrical energy such as kilowatthours (kWh), megawatthours (MWh), or 

gigawatthours (GWh). 

This report explores trends in both large-scale and small-scale battery storage systems. We define largescale systems as those synchronized to the grid that have a nameplate power capacity (the maximum 

rated output, usually indicated on a nameplate physically attached to the unit) of 1 MW or greater. 

Small-scale refers to systems that have less than 1 MW in power capacity and are typically connected to 

a distribution network (the portion of the electrical system that delivers electricity to end users).18

Although we release monthly updates of newly operating and planned large-scale battery storage 

generators power capacity on Form EIA-860M, we only report operational large-scale battery storage 

energy capacity data on our annual release of Form EIA-860. At the time of writing this report, we had 

only released energy capacity data through 2019 (the latest release of Form EIA-860). Therefore, any 

section of this report showing battery storage energy capacity data (the majority of the report) will only 

include information through the end of 2019. A notable exception is the Ongoing Trends section, which 

uses data through December 2020 from Form EIA-860M to display information of near-term planned 

builds power capacity.

 

18 Large-scale and small-scale reporting conventions are derived from the reporting requirements of our Electric Generators 

Report (Form EIA-860) survey and our Electric Power Industry Report (Form EIA-861) survey. The reporting cut-offs for these 

surveys are based entirely on the power capacity of the facility.
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 35

Appendix B: Other Storage Technologies

This report has focused primarily on electrochemical energy (or battery) storage; however, energy 

storage can use electrical, thermal, and mechanical technologies. Electrical energy storage includes 

capacitors and superconductors. Thermal storage includes water, ice, molten salts, and ceramics. 

Mechanical storage includes technologies such as hydroelectric pumped storage, flywheels, and 

compressed-air energy storage (CAES). 

Hydroelectric pumped storage uses electricity to pump water into an elevated reservoir so it can be 

used to drive a hydroelectric turbine when electricity is needed. Although the United States has 

significantly more operating hydroelectric pumped storage capacity than battery storage capacity, most 

pumped storage was installed in the 1970s and early 1980s (Figure 19). California, Virginia, and South 

Carolina account for most of the existing hydroelectric pumped storage capacity. The largest single 

facility in the United States was installed in 1985 in Bath County, Virginia, and has a capacity of 3 GW.

Figure 19. Hydroelectric pumped storage capacity (1960–2019)

power capacity 

gigawatts

Source: U.S. Energy Information Administration, 2019 Form EIA-860, Annual Electric Generator Report

Flywheels store energy by using an electric motor to speed up a spinning mass, which can be used later 

to spin a turbine to produce electricity. To reduce losses, the mass is spinning in a nearly frictionless 

enclosure. Flywheels are well suited to provide power-oriented applications that require many charge 

and discharge cycles. Three large-scale flywheel systems are currently operating in the United States: a 

20 MW system in New York, a 20 MW system in Pennsylvania, and a 2 MW system in Alaska. One 5 MW 

standby flywheel system is in Texas.

CAES uses electricity to compress air and store it in an underground cavern. The air is then expanded 

through a turbine when electricity is needed. The only operable large-scale CAES system in the United 

States is a 110 MW system that was installed in Alabama in 1991 by PowerSouth Energy Cooperative. 

0

5

10

15

20

25

pumped

hydroelectric

storage

large-scale

battery

storage

0

5

10

15

20

25

30

0

2

4

6

8

10

12

before

1960

1960s 1970s 1980s 1990s 2000s 2010-

2019

cumulative 

additions cumulative capacity
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 36

The Apex Bethel Energy Center is a 317 MW CAES system in Texas that is expected to enter operation in 

late 2023.

Thermal storage systems take excess energy produced during the day to heat salt or other materials that 

can power a steam turbine. Thermal storage can also be used as a distributed energy resource, for 

example, by chilling water overnight to use for space cooling during summer days. All existing large-scale 

thermal energy storage in the United States uses concentrated solar power (CSP) technology. CSP 

reflects rays from the sun to a receiver to produce steam directly or to heat up alternative fluids, which 

are used to generate steam through a heat exchanger. The steam is run through a turbine to generate 

electricity. Some of these alternative heat transfer or storage fluids can store energy for long durations, 

and they can be used to generate steam and electricity at night using thermal solar energy gathered 

during the day. Of the eight CSP projects currently operating with a total capacity of 1,775 MW, only 

Arizona Solar One LLC’s 295 MW Solana Generating Station plant in Arizona and Tonopah Solar Energy 

LLC’s 110 MW Crescent Dunes Solar Energy plant in Nevada employ thermal storage systems.

Other energy storage technologies are in different phases of development but have yet to have

significant deployment in large-scale grid applications. 
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U.S. Energy Information Administration | U.S. Battery Storage Market Trends 37

Appendix C: Installed Power and Energy Capacity of Large-Scale 

Batteries by State

2019 2020

State

Power capacity 

(MW)

Energy capacity 

(MWh)

Power capacity 

(MW)

Energy capacity 

(MWh)

AK 45 16 45 16

AL 1 2 1 2

AR 12 26 12 26

AZ 42 93 42 101

CA 253 646 536 930

CO 11 28 9 27

CT 2 6 2 6

FL 19 60 29 100

GA 1 2 2 6

HI 63 183 63 183

IA 1 4 1 5

IL 133 66 133 66

IN 28 32 38 42

LA 1 1 1 1

MA 33 95 71 170

MD 13 6 11 5

ME 17 11 37 31

MI 1 1 1 1

MN 16 38 16 38

MO 2 3 2 3

NC 1 1 10 10

NJ 43 44 43 44

NM 2 2 2 2

NY 33 94 48 131

OH 33 19 33 19

OK - - 10 20

OR 5 1 5 1

PA 28 23 28 23

SC 4 4 4 4

SD 1 1 1 1

TX 114 106 223 232

VT 11 33 11 33

WA 6 13 5 9

WV 50 31 50 31

Source: U.S. Energy Information Administration, 2019 and early release of the 2020 Form EIA-860, Annual Electric Generator 

Report

Note: The data for year 2020 in this table are from the early release of the 2020 Form EIA-860, Annual Electric Generator 

Report. The 2019 data from this table use data from the final release of the 2019 Form EIA-860, Annual Electric Generator 

Report. MW = megawatts; MWh = megawatthours.