U.S. Battery Storage 

Market Trends

May 2018

Independent Statistics & Analysis

www.eia.gov

U.S. Department of Energy

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

Acknowledgements

The authors of this report gratefully acknowledge the energy storage stakeholders in various public and 

private positions that participated in interviews with the U.S. Energy Information Administration staff. 

Kevin Lynn, Jennifer Garson, Guohui Yuan (U.S. Department of Energy), Eric Dufek, Kurt Myers (Idaho 

National Laboratories), Paul Denholm (National Renewable Energy Laboratories), Babu Chalamala, 

Raymond Byrne, Tu Nguyen, David Copp (Sandia National Laboratories), Mary Wierzbicki, Michael 

Herbert (Federal Energy Regulatory Commission), Jill Powers, William Weaver, Andrew Ulmer, Eric Kim 

(California Independent System Operator), Rachel McMahon (California Public Utilities Commission), 

Michael DeSocio, David Flanagan, Raymond Stalter (New York Independent System Operator), Jason 

Doling, Benjamin Falber, Dana Nilsson, Jennifer Phelps (New York State Energy Research and 

Development Authority), Logan Goldie-Scot, Sam Cotterall (Bloomberg New Energy Finance), Ravi 

Manghani (Greentech Media), Haresh Kamath (Electric Power Research Institute), Sam Jaffe (Cairn 

Energy Research Advisors), Davion Hill (DNV-GL), Simkho Zirkiyev and Adrienne Lalle (Con Edison), Loic 

Gaillac (Southern California Edison), Kiran Kumaraswamy (Fluence), Ken Boyce (Underwriters 

Laboratories), Wufan Jia (Mobility House), Carly Sorrentino and Manal Yamout (Advanced Microgrid 

Solutions) all provided helpful feedback and advice during the process of producing this report.
U.S. Energy Information Administration | US. Battery Storage Market Trends iii

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

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 Investment-owned utilities

ITC Investment Tax Credit

IPP Independent power producers

ISO-NE Independent System Operator of New England

KIUC Kauai Island Utility Cooperative

kW Kilowatt

kWh Kilowatthour

MISO Mid-Continent Independent System Operator

MW Megawatt

MWh Megawatthour

PGE Pacific Gas and Electric

PJM Pennsylvania-New Jersey-Maryland Interconnection

PPA Power purchase agreement

SCE Southern California Edison

SDGE San Diego Gas and Electric

SGIP Self-Generation Incentive Program

SMUD Sacramento Municipal Utility District
U.S. Energy Information Administration | US. Battery Storage Market Trends iv

Table of Contents

Acknowledgements....................................................................................................................................... ii

List of Acronyms........................................................................................................................................... iii

List of Figures................................................................................................................................................ v

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

Introduction ..................................................................................................................................................3

Large-Scale Battery Storage Trends..............................................................................................................4

Regional Trends.......................................................................................................................................4

Ownership Trends....................................................................................................................................7

Chemistry Trends.....................................................................................................................................8

Chemistry Descriptions.....................................................................................................................8

Chemistry Trends ..............................................................................................................................9

Current Applications...................................................................................................................................10

Application Descriptions .................................................................................................................10

Applications by Region....................................................................................................................11

Battery Storage Costs..................................................................................................................................12

Cost Background .............................................................................................................................12

Cost Results.....................................................................................................................................13

Other Cost Metrics..........................................................................................................................14

Small-Scale Energy Storage Trends.............................................................................................................15

Small-Scale Energy Storage Trends in California.............................................................................15

Small-Scale Energy Storage Trends in the Rest of the United States..............................................16

Market and Policy Drivers...........................................................................................................................17

Wholesale Market Rules........................................................................................................................17

State-Level Policy Actions......................................................................................................................17

Policy Actions in California ..............................................................................................................18

Policy Actions in the Rest of the United States...............................................................................18

Future Trends..............................................................................................................................................19

Appendix .....................................................................................................................................................21

Appendix A: Applications Additional Figures.........................................................................................22

Appendix B: Other Storage Technologies..............................................................................................25
U.S. Energy Information Administration | US. Battery Storage Market Trends v

List of Figures

Figure 1. Large-Scale U.S. Power and Energy Capacity by Region (2017).....................................................4

Figure 2. U.S. Large-Scale Battery Storage Installations by Region (2017)...................................................5

Figure 3. U.S. Large-Scale Battery Storage Capacity by Region (2003–2017)...............................................6

Figure 4. Power Capacity and Duration of U.S. Large-Scale Battery Storage by Region (2017)...................7

Figure 5. U.S. Large-Scale Battery Storage Capacity by Region and Ownership Type (2016).......................7

Figure 6. U.S. Large-Scale Battery Storage Capacity by Chemistry (2003–2016) .........................................9

Figure 7. Applications Served by U.S. Large-Scale Battery Storage (2016).................................................11

Figure 8. Total Installed Cost of Large-Scale Battery Storage Systems by Duration...................................13

Figure 9. U.S. Small-Scale Energy Storage Capacity by Sector (2016) ........................................................15

Figure 10. U.S. Small-Scale Energy Storage Capacity Outside of California by Sector (2016) ....................16

Figure 11. U.S. Large-Scale Wind, Solar, and Battery Storage Capacity Projections (2020–2050).............19

Figure 12. Applications Served by U.S. Large-Scale Battery Storage (2016)...............................................22

Figure 13. U.S. Large-Scale Battery Storage Capacity and Applications Served (2016)..............................23

Figure 14. U.S. Large-Scale Battery Storage Capacity and Applications Served (2016)..............................24

Figure 15. U.S. Hydroelectric Pumped Storage Capacity (1960–2017).......................................................25
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 1

Executive Summary

This report explores trends in U.S. battery storage capacity additions and describes the current state of 

the market, including information on applications, cost, and market and policy drivers. There are a 

number of key takeaways:

• At the end of 2017, 708 megawatts (MW) of power capacity,

1 representing 867 megawatthours 

(MWh) of energy capacity,

2 of large-scale3 battery storage capacity was in operation. 

• Over 80% of U.S. large-scale battery storage power capacity is currently provided by batteries 

based on lithium-ion chemistries.

• About 90% of large-scale battery storage in the United States is installed in regions covered by 

five of the seven organized independent system operators (ISOs) or regional transmission 

organizations (RTOs) and in Alaska and Hawaii (AK/HI).

Figure ES1. U.S. Large-Scale Battery Storage Capacity by Region (2003–2017)

power capacity energy capacity

megawatts megawatthours

Notes: 2017 energy capacity data for large-scale battery storage are based on preliminary estimates; energy capacity annual 

additions do not include 26 MW of since-retired batteries because energy capacity is not reported for retired generators

Sources: U.S. Energy Information Administration, Form EIA-860M, Preliminary Monthly Electric Generator Inventory; U.S. Energy 

Information Administration, Form EIA-860, Annual Electric Generator Report.

• Nearly 40% of existing large-scale battery storage power capacity (and 31% of energy capacity)

lies in the Pennsylvania-New Jersey-Maryland Interconnection (PJM), which runs energy and 

capacity markets and the transmission grid in 13 eastern states and the District of Columbia. 

o In 2012, PJM created a new frequency regulation market product for fast-responding 

resources, the conditions of which were favorable for battery storage. However, recent 

changes in PJM’s market rules have slowed battery installations in the region.

o Most existing large-scale battery storage power capacity in PJM is owned by 

independent power producers providing power-oriented frequency regulation services. 

 1 Power capacity is the maximum instantaneous amount of power output, and is measured in units such as megawatts (MW)

2 Energy capacity of the storage system is the total amount of energy that can be stored or discharged by the battery storage 

system and is measured in megawatt-hours (MWh)

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

0

150

300

450

600

750

900

0

50

100

150

200

250

300

2003 2005 2007 2009 2011 2013 2015 2017

Other

AK/HI

ISO-NE

MISO

ERCOT

CAISO

PJM

annual additions cumulative capacity

0

150

300

450

600

750

900

0

50

100

150

200

250

300

2003 2005 2007 2009 2011 2013 2015 2017

annual additions cumulative capacity

Other

AK/HI

ISO-NE

MISO

ERCOT

CAISO

PJM
May 2018

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

• Installations in California Independent System Operator (CAISO) territory accounted for 18% of 

existing U.S. large-scale battery storage power capacity in 2017, but they accounted for 44% of 

existing energy capacity. 

o In 2013, the California Public Utility Commission (CPUC) implemented Assembly Bill 

2514 by setting a mandate for the state’s investor-owned utilities to procure 1,325 MW 

of energy storage by 2020. 

o Large-scale installations in California tend to provide energy-oriented services and tend 

to serve a wider array of applications than systems in PJM.

o In addition, nearly 90% of reported small-scale4 storage power capacity in the United 

States was reported by four California utilities.

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

and energy capacity of a system. 

o In general, total installed system costs for batteries of shorter duration are less 

expensive than long-duration systems on a per-unit of power capacity basis. 

o In terms of costs per-unit of energy capacity, the reverse is true—the longer duration 

batteries will typically have lower normalized costs compared with shorter-duration 

batteries. 

Figure ES2. Total Installed Cost of Large-Scale Battery Storage Systems by Duration

power capacity cost energy capacity cost

dollars per kilowatt dollars per kilowatthour

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

• Battery storage can serve many applications. However, the functional ability of storage to serve 

these applications has traditionally been not well defined under existing market rules and 

policies. As the technology has matured and as the industry stakeholders in some regions have 

gained experience financing, procuring, and operating storage installations, the situation has 

changed and more clarity has begun to be provided. Most of the activity has been led by specific 

ISOs/RTOs and state-level regulators.

 4 Small-scale refers to systems connected to the distribution network and have a nameplate power capacity less than 1 MW.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

short- medium- long- all

duration

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

short- medium- long- all

duration

Series4

75th percentile

median

capacityweighted 

average

25th percentile
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 3

Introduction

This report examines trends in U.S. battery storage capacity installations and describes the current state 

of the market, including information on applications, cost, as well as market and policy drivers for recent 

battery storage installations. 

Many types of technologies can store energy, including electrical, thermal, mechanical, and

electrochemical technologies. Hydroelectric pumped storage, a form of mechanical energy storage, 

accounts for the greatest share of large-scale energy storage power capacity in the United States. 

However, large-scale energy storage capacity additions since 2003 have been almost exclusively 

electrochemical (or battery) storage. For this reason, most this report focuses on battery storage 

technologies, although other energy storage technologies are addressed in the appendix.

An important distinction for battery storage is the difference between power and energy capacity. 

Conventional generation technologies are often characterized in terms of power capacity, which is the 

maximum instantaneous amount of power output, and is measured in units such as megawatts (MW). 

However, batteries are limited by the time they can sustain power output before they need to recharge. 

The duration is the length of time that a storage system can sustain power output at its maximum 

discharge rate, typically expressed in hours. The energy capacity of the battery storage system is the 

total amount of energy that can be stored or discharged by the battery storage system and is measured 

in units such as megawatthours (MWh).

This report explores trends in both large-scale and small-scale battery storage systems. Large-scale (or

utility-scale) systems are connected to the grid and have a nameplate power capacity greater than 1 

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

connected to a distribution network.5

 5 Large-scale and small-scale reporting conventions are derived from the reporting requirements of the EIA Electric Generators 

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

surveys are based entirely on the power capacity of the generator and not on location with respect to the customer meter, 

distribution network, or wholesale grid.
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 4

Large-Scale Battery Storage Trends

The first large-scale6 battery storage installation in the United States that was still in operation as of 

2017 entered service in 2003. Installed power capacity has nearly doubled every two years since 2011, 

and by the end of 2017, 708 MW was in operation. Independent power producers in the PennsylvaniaNew Jersey-Maryland interconnection (PJM), which covers all or part of 13 eastern states and the 

District of Columbia, have installed most of the existing power capacity, but regulated utilities in the

California Independent System Operator (CAISO) territory have procured significant amounts of energyoriented capacity as well. In 2016, annual U.S. power capacity additions reached an all-time high when 

197 MW of large-scale battery storage was installed. Most U.S. installations use lithium-ion batteries, 

but design parameters such as power capacity, energy capacity, and duration vary by region and by 

project. 

Regional Trends

As shown in Figure 1, about 90% of large-scale battery storage capacity in the United States is installed 

in the regions covered by five of the seven organized independent system operators (ISOs) or regional 

transmission organizations (RTOs)7 and the non-contiguous states of Alaska and Hawaii (AK/HI). These 

regions account for 53% of total U.S. large-scale power capacity and have the largest shares of storage 

capacity relative to their shares of total installed capacity. The disproportionate share of large-scale 

battery storage in these regions results from differences in market design and policies.

Figure 1. Large-Scale U.S. Power and Energy Capacity by Region (2017)

Notes: Energy capacity data for large-scale battery storage installed in 2017 are based on preliminary estimates.

Sources: U.S. Energy Information Administration, Form EIA-860M, Preliminary Monthly Electric Generator Inventory; U.S. Energy 

Information Administration, Form EIA-860, Annual Electric Generator Report.

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

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

demand bids for wholesale electric power. The Electric Reliability Council of Texas (ERCOT) is regulated by the Public Utility 

Commission of Texas.

18%

6%

9%

17%

0.5% 3%

47%

Total U.S. large-scale 

power capacity

(1,187 GW)

39%

18%

3% 12%

3%

12%

13%

U.S. large-scale battery 

storage power capacity 

(708 MW)

31%

44%

5%

3%

3% 7%

7%

U.S. large-scale battery 

storage energy capacity 

(867 MWh)

PJM

CAISO

ERCOT

MISO

ISO-NE

AK/HI

Other
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 5

Figure 2. U.S. Large-Scale Battery Storage Installations by Region (2017)

power capacity 

megawatts

energy capacity

megawatthours

Notes: Energy capacity data for large-scale battery storage installed in 2017 are based on preliminary estimates.

Sources: U.S. Energy Information Administration, Form EIA-860M, Preliminary Monthly Electric Generator Inventory; U.S. Energy 

Information Administration, Form EIA-860, Annual Electric Generator Report.

PJM

278 MW

40 MW

<5 MW

CAISO

130 MW

AK/HI

83 MW

ERCOT

83 MW

MISO

21 MW

ISO-NE

23 MW

Other

90 MW

PJM

269 MWh

120 MWh

<5 MWh

CAISO

381 MWh

AK/HI

59 MWh

ERCOT

41 MWh

MISO

28 MWh

ISO-NE

26 MWh

Other

64 MWh
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 6

Between 2003 and 2017, 734 MW of large-scale battery storage power capacity was installed in the 

United States, two-thirds of which was installed in the past three years. Nearly 40% of existing largescale battery storage power capacity lies in the PJM Interconnection, shown in Figure 2. In 2012, PJM 

created a new frequency regulation market for fast-responding resources, the conditions of which were 

especially favorable for battery storage. 

Figure 3. U.S. Large-Scale Battery Storage Capacity by Region (2003–2017)

power capacity energy capacity

megawatts megawatthours

 

Notes: Energy capacity data for large-scale battery storage installed in 2017 are based on preliminary estimates. Energy 

capacity additions do not include 26 MW of since-retired batteries since energy capacity is not reported for retired generators.

Sources: U.S. Energy Information Administration, Form EIA-860M, Preliminary Monthly Electric Generator Inventory; U.S. Energy 

Information Administration, Form EIA-860, Annual Electric Generator Report.

Although installations in CAISO account for 18% of existing U.S. large-scale battery storage power 

capacity, they account for 44% of existing energy capacity in 2017, as illustrated in Figure 3. Of the 

power capacity in California, 62% was procured by two electric utilities, Southern California Edison and 

San Diego Gas and Electric, to help address reliability risks as a result of constraints on the natural gas 

supply following a leak at a major natural gas storage facility in the region. The California Public Utilities 

Commission 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. (See the section on market and policy drivers for 

more information on California’s activities related to energy storage.)

Given the trend in California of using battery storage for applications such as reliability, large-scale 

battery storage installations in California tend to be energy-oriented with small power capacities and 

long durations. Large-scale battery storage installations in CAISO have an average power capacity of 5 

MW and an average duration of 4 hours, as shown in Figure 4. Installations in PJM, however, tend to be 

power-oriented with larger capacities and shorter durations to serve frequency regulation applications. 

Large-scale battery storage installations in PJM have an average power capacity of 12 MW and an 

average duration of less than 45 minutes. Other markets in the U.S. show a mix of power- and energyoriented battery installations. 

0

150

300

450

600

750

900

0

50

100

150

200

250

300

2003 2005 2007 2009 2011 2013 2015 2017

annual additions cumulative capacity

0

150

300

450

600

750

900

0

50

100

150

200

250

300

2003 2005 2007 2009 2011 2013 2015 2017

annual additions cumulative capacity

PJM

CAISO

ERCOT

MISO

ISO-NE

AK/HI

Other
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 7

Figure 4. Power Capacity and Duration of U.S. Large-Scale Battery Storage by Region (2017)

Note: Energy capacity data for large-scale battery storage installed in 2017 are based on preliminary estimates. Duration is 

calculated by dividing nameplate energy capacity (in MWh) by maximum discharge rate (in MW), except in cases where the 

maximum discharge rate was not available, in which case the nameplate rating was used instead. 

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

Information Administration, Form EIA-860, Annual Electric Generator Report.

Ownership Trends

At the end of 2016, more than half of existing U.S. large-scale battery storage power capacity was 

owned by independent power producers (IPPs). As shown in Figure 5, overall ownership of U.S. largescale battery storage in terms of energy capacity is more balanced between IPPs and investor-owned

utilities (IOUs). This ownership trend reflects the dominance of IPPs in PJM, with its power-oriented 

storage applications as well as the IOU ownership of energy-oriented reliability assets in CAISO.

Figure 5. U.S. Large-Scale Battery Storage Capacity by Region and Ownership Type (2016)

power capacity energy capacity

megawatts megawatthours

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

0

2

4

6

8

10

12

14

0 50 100 150 200 250 300

duration (hours)

PJM

0 50 100 150 200 250 300

power capacity (MW)

CAISO

0 50 100 150 200 250 300

rest of U.S.

ERCOT 

MISO 

ISO-NE

AK/HI

other

0

50

100

150

200

250

300

0

50

100

150

200

250

300

Independent Power 

Producer

Investor-Owned Utility

Cooperative

State-Owned Utility

Municipally-Owned 

Utility

Commercial/Industrial
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 8

With relatively few large-scale battery storage installations outside of PJM and CAISO, it is difficult to 

anticipate how ownership type in other regions may develop. Nonetheless, some noteworthy points 

emerge. The five installations in the Mid-Continent Independent System Operator (MISO) and 

Independent System Operator of New England (ISO-NE) are mostly owned by IOUs. In Alaska, most 

large-scale battery storage capacity is owned by cooperatives, which is a relatively common ownership 

type for generation assets in the state. State-owned utilities own 6% of large-scale battery storage 

power capacity, driven by a single large (30 MW/20 MWh) installation in southern California owned by 

the Imperial Irrigation District.

Chemistry Trends

Battery storage encompasses several different battery chemistries, including lithium-ion, nickel-based, 

sodium-based, lead acid, and flow batteries. 

Chemistry Descriptions

Some existing battery storage chemistries that have seen grid-scale deployment8,9,10 include: 

• Lithium-ion represented more than 80% of the installed power and energy capacity of largescale battery storage in operation in the United States at the end of 2016. Lithium-ion batteries 

have high-cycle efficiency and fast response times. In addition, their high energy density makes 

them the current battery of choice for the portable electronic and electric vehicle industries.

• Nickel-based batteries were used in some of the earliest U.S. large-scale battery storage systems

installed, including a 2003 system added in Fairbanks, Alaska. Since then, limited deployment of 

this battery chemistry has occurred in the United States. Nickel-based batteries typically have 

high energy density and reliability but relatively low cycle life.

• Sodium-based battery storage accounted for 3% of the installed large-scale power capacity and 

12% of the installed large-scale energy capacity in the United States at the end of 2016. This

type of battery storage is a mature technology based on abundant materials with a long cycle 

life that is suitable for long-discharge applications. These systems are based on molten 

electrolyte materials and require high operating temperatures (~300°C). 

• Lead acid is one of the oldest forms of battery storage, with development beginning in the mid1800s. Lead acid is a mature technology that is widely used in passenger vehicles. Lead acid 

covered only 2%–3% of large-scale battery storage capacity installed in the United States at the 

end of 2016 and has seen limited grid-scale deployment because of its relatively low energy 

density and cycle life. 

• Flow battery systems have one or more chemical components that are dissolved in a liquid 

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

overall battery capacity is determined by tank size and can be expanded to meet different 

applications. They have long cycle life, and their operational lifetime is projected to be long. 

Within the United States at the end of 2016, flow batteries represented less than 1% of the 

installed power and energy capacity of large-scale battery storage. 

 8 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

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

10 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
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 9

Chemistry Trends

A number of trends exist in battery chemistry. 

Figure 6. U.S. Large-Scale Battery Storage Capacity by Chemistry (2003–2016)

power capacity energy capacity

megawatts megawatthours

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

The earliest large-scale battery storage installations in the United States used nickel-based and sodiumbased batteries, as seen in 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 lithium-ion 

batteries.

11

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

U.S. large-scale flow battery storage system in Washington State. Two more flow batteries were 

installed in 2017 by electric utilities in Washington and California. Other battery storage chemistries are 

in different phases of development but have yet to see significant deployment in large-scale grid 

applications. 

 11 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

0

100

200

300

400

500

600

700

0

50

100

150

200

250

300

350

2003 2005 2007 2009 2011 2013 2015

annual additions cumulative capacity

0

100

200

300

400

500

600

700

0

50

100

150

200

250

300

350

2003 2005 2007 2009 2011 2013 2015

annual additions cumulative capacity

lithium-ion 

nickel-based

sodium-based lead-acid

other
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 10

Current Applications

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

constraints are often designed with the intent of optimizing the delivery of certain types of services or 

applications to the grid. It is also possible and sometimes necessary to combine applications to maximize 

the value of the system.

Application Descriptions

Some existing batteries applications and their definitions12 include

• Frequency regulation helps balance momentary differences between demand and supply, often 

in response to deviations in the interconnection frequency from 60 Hertz.

• Spinning reserve provides synchronized capacity for grid frequency management, which may be 

available to use during a significant frequency disturbance. For example, during an unexpected 

unavailability of generation capacity. This reserve ensures system operation and availability.

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

local voltage within specified limits by serving as a source or sink of reactive power.

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

variations—this 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 station generation capacity 

or purchase capacity in the wholesale electricity market, often in times of high (peak) demand.

• Load management provides a customer-related service, such as power quality, power reliability 

(grid-connected or microgrid operation), retail electrical energy time-shift, demand charge 

management, or renewable power consumption maximization.

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

non-dispatchable generator (e.g., wind or solar) in order to comply with local grid codes related

to grid stability or prevent over production or over-production penalties.

• Arbitrage occurs when batteries charge with inexpensive electrical energy and discharge when 

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

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

energy that can be used to energize transmission and distribution lines, provides start-up power 

for generators, or provides a reference frequency.

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

system equipment lower than a specified maximum. This allows for delays or completely avoids

the need to upgrade a transmission system or avoids congestion-related costs and charges.

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

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

 12 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
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 11

Applications by Region

Figure 7 illustrates the total amount of power and energy capacity that is available for each application. 

In the United States, 88% of large-scale battery storage power capacity provides frequency regulation, 

which helps electric systems quickly balance frequency when unexpected differences in electricity 

supply and demand occur. Installations in PJM, where a specific market product for fast-ramping 

frequency regulation has led independent power producers to rapidly deploy large-scale battery 

storage, have largely driven this trend. Installations in CAISO tend to serve a wider array of applications 

than those in PJM because many have been procured by regulated utilities to serve multiple applications 

without necessarily being directly compensated for each application through market mechanisms.

Figure 7. Applications Served by U.S. Large-Scale Battery Storage (2016)

power capacity energy capacity

megawatts megawatthours

Note: The figure does not include a 10 MW/7.5 MWh battery storage unit located in Maui, Hawaii, which did not report any 

applications in 2016.

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

Figure 12 (included in the appendix) illustrates how each battery reports the applications that they 

provide, sorted by region and power capacity of the battery system. PJM batteries selected 1.1 

applications on average, while CAISO batteries selected 4.4 applications on average. Figure 13 and 

Figure 14 combine the information in Figure 7 (above) and Figure 12 to show the power capacity and 

then the energy capacity totals available to serve each application as selected by the individual battery 

systems reporting in 2016. 

0 100 200 300 400 500 600 700

co-located renewable firming

transmission/distribution deferral

backup power

arbitrage

excess wind/solar generation

load management

system peak shaving

load following

voltage/reactive power support

ramping/spinning reserve

frequency regulation

installed capacity

0 100 200 300 400 500 600 700

PJM

CAISO

ERCOT 

MISO

ISO-NE 

AK/HI 

Other
May 2018

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

Battery Storage Costs 

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

and energy capacity of a system. 

Cost Background

The discussion of costs can be 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. Short-duration battery storage systems refer to 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 –2.0 hours, while the long-duration category includes all systems with more 

than 2.0 hours of nameplate duration. 

The average characteristics of the duration-binned sample data are summarized in Table 1. Given the 

small sample size for each bin (between 8–10 reported units), the values should be used with caution. 

No conclusions about the state of the industry as a whole can be drawn from these values. Instead, they 

are used in this report to illustrate the importance of defining the system characteristics when 

discussing costs, especially in terms of power capacity versus energy capacity. The reported capital cost 

values are from large-scale battery storage systems installed across the United States between 2013 and 

2016 and include multiple reported battery chemistries. As a result, these reported values do not 

necessarily reflect trends in time or technology-specific tradeoffs. 

As shown in Table 1, short-duration battery storage systems have an average power capacity of 13 MW, 

with medium-duration systems slightly higher at 13.8 MW. The average system size in terms of power 

capacity for the long-duration battery storage systems is much smaller, at 2.7 MW. In contrast, the 

average energy capacity for the medium- and long-duration battery storage systems both exceed 15 

MWh, while the average for the short-duration battery storage systems, at 4.7 MWh, is one-third the 

size of the longer duration systems.

Table 1. Sample Characteristics of Capital Cost Estimates for Large-Scale Battery Storage by Duration

shortduration

<0.5 hours

mediumduration

0.5-2 hours

longduration

>2 hours

Number of battery systems reported 10 10 8

Average of nameplate power capacity, megawatts (MW) 13.0 13.8 2.7

Average of nameplate energy capacity, megawatthours (MWh) 4.7 15.6 16.7

Average of nameplate duration, hours 0.4 1.1 5.6

Capacity-weighted cost per unit power capacity, 

dollars per kilowatts ($/kW) 

944 1,533 2,430

Capacity-weighted cost per unit energy capacity, 

dollars per kilowatthour ($/kWh)

2,597 1,352 399

Source: U.S. Energy Information Administration, Form EIA-860, Annual Electric Generator Report
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 13

Cost Results

As shown in Figure 8, battery systems with shorter durations will typically have lower normalized power 

capacity costs ($/kW) than batteries with longer nameplate durations. The opposite is generally true 

when examining normalized energy capacity costs ($/kWh), as the total system costs for longer-duration 

systems are spread out over a larger basis of stored energy. Nonetheless, the range of normalized cost 

values is driven by technological and site-specific requirements. 

Figure 8. Total Installed Cost of Large-Scale Battery Storage Systems by Duration

power capacity cost energy capacity cost

dollars per kilowatt dollars per kilowatthour

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

Unlike non-storage technologies, battery storage can supply and consume energy at different times of 

the day, creating an unusual combination of cost and revenue streams that make direct comparisons to 

other generation technologies challenging. They are not stand-alone generation sources and must buy 

electricity supplied by other generators to recharge and cover the round-trip efficiency13 losses 

experienced during cycles of charging and discharging.

There are two challenges. First, quantifying the competitiveness of a battery storage technology with 

other technologies operating on the grid therefore must consider the individual markets that the 

storage technology is planning to be used in and what revenue opportunities exist for the technology. 

Another challenge in determining the costs of battery storage systems involves the degradation of the 

system over time. Degradation is the lasting and continuous decrease in either or both a battery’s power 

or energy performance linked to use or age of a battery component or system. Owners of battery 

storage systems typically contract for a certain level of performance at specified intervals in the battery 

system’s lifetime. The performance can sometimes be characterized by the full cycle power input and 

output at an agreed-upon charge/discharge rate. 

 13 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.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

short- medium- long- all

duration

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

short- medium- long- all

duration

Series4

75th percentile

median

capacityweighted 

average

25th percentile
May 2018

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

Storage system operators can deliver the agreed-upon performance of the system over its lifetime in 

one of two ways:

• 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 later in its lifetime. 

• Continual upgrades, replacing some portion of it to maintain the agreed-upon performance over 

its lifetime. 

The two approaches to meeting performance requirements affect the installed capital costs of the 

system. The first approach will lead to a higher initial installed capital cost, while the second will lead to 

a higher operation and maintenance cost throughout the lifetime of the storage facility. Therefore, 

comparing only the normalized capital cost of various battery systems, as shown in Figure 8, does not 

necessarily capture the variation in the lifetime costs. The costs collected and presented in this report 

are not sufficient to capture all of these nuances.

Other Cost Metrics 

Outside of the capital costs presented in this section, trends in prices for battery storage can be 

observed in the negotiated price of electricity for projects that are financed through power purchase 

agreements (PPAs). PPAs are projects that are owned and operated by entities that supply electricity to 

a customer—typically an electric utility—at a fixed price per unit of electricity delivered. These prices are 

heavily influenced by each project’s specifications, contract terms, and other localized factors. PPAs are 

different from capital costs and are not necessarily reflective of total capital costs of the system. 

A few recent examples of PPA prices for projects that pair solar with battery storage systems include:

• In May 2017, SolarCity (a subsidiary of Tesla) partnered with the Kauai Island Utility Cooperative 

(KIUC) to install a 15 MW solar array paired with an 11 MW battery storage system. The project 

was financed using a 20-year PPA at a price of $139/MWh.

14

• In early 2017, KIUC signed a PPA with AES corporation at $110/MWh to finance a 28 MW solar 

array paired with a 20 MW/100 MWh battery system that is slated to come online by the end of 

2018.

15

• In May 2017, NextEra Energy entered into a 20-year PPA with Tucson Electric Power to finance a 

100 MW solar array paired with a 30 MW/120 MWh energy storage system—the agreed-upon 

price was $45/MWh.

16

• In December 2017, Xcel Energy’s Colorado utility subsidiary announced the results of a recent 

solicitation where the median bid price for solar-plus-storage projects was $36/MWh and the 

median bid price for wind-plus-storage projects was $21/MWh.17

 14 Bloomberg, “Tesla Completes Hawaii Storage Project That Sells Solar at Night,” March 8, 2017, 

https://www.bloomberg.com/news/articles/2017-03-08/tesla-completes-hawaii-storage-project-that-sells-solar-at-night.

15 Utility Dive, “Hawaii co-op signs deal for solar+storage project at 11¢/kWh,” January 10, 2017, 

https://www.utilitydive.com/news/hawaii-co-op-signs-deal-for-solarstorage-project-at-11kwh/433744/.

16 Utility Dive, “Updated: Tucson Electric signs solar + storage PPA for 'less than 4.5¢/kWh',” May 23, 2017, 

https://www.utilitydive.com/news/updated-tucson-electric-signs-solar-storage-ppa-for-less-than-45kwh/443293/.

17 Utility Dive, “Renewable plus storage bids in Xcel Colorado solicitation could set low-price benchmark,” January 16, 2018, 

https://www.utilitydive.com/news/renewable-plus-storage-bids-in-xcel-colorado-solicitation-could-set-low-pri/514566/. 
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 15

Small-Scale Energy Storage Trends

In 2016, U.S. utilities reported 66 MW of existing small-scale storage power capacity. More than 60% of 

this capacity was installed in the commercial sector, and 31% was installed in the industrial sector. 

Small-Scale Energy Storage Trends in California

As shown in Figure 9, nearly 90% of reported small-scale storage power capacity in the United States is 

in California and, specifically, owned by four utilities: Southern California Edison (SCE), Pacific Gas and 

Electric (PGE), San Diego Gas and Electric (SDGE), and Sacramento Municipal Utility District (SMUD). 

Most installations of small-scale storage in the commercial sector in California are in SCE’s and SDGE’s

territories, with 50% and 38% of such capacity, respectively. Most installations (71%) of small-scale

storage in the industrial sector in California are in PGE’s territory.

Figure 9. U.S. Small-Scale Energy Storage Capacity by Sector (2016)

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

is not located at an ultimate customer’s site but are in front of the meter and/or connected directly to a distribution system. 

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

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. SGIP provided rebates to 49 MW of storage through the end of 2016,18

which is 83% of all reported small-scale storage power capacity in California. Installations receiving 

rebates through SGIP contribute to California’s energy storage mandate (Assembly Bill 2514), which 

requires 200 MW of customer-sited energy storage to be installed by 2024. In May 2017, the California 

Public Utilities Commission implemented Assembly Bill 2868 by ordering SCE, PGE, and SDGE to procure 

up to an additional 500 MW of distributed energy storage, including no more than 125 MW of customersited energy storage.

 18 Itron, 2018 SGIP Advanced Energy Storage Impact Evaluation (Davis, CA: Itron, August 31, 2017), 

http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442454964. 

0

100

200

300

400

500

600

large-scale

battery

storage

small-scale

energy

storage

power capacity

megawatts

5%

54%

30%

2%

7%

2%

Non-CA

share of total small-scale energy storage power capacity (66 MW)

residential commercial industrial direct connected
May 2018

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

Small-Scale Energy Storage Trends in the Rest of the United States

After California, the states with the most small-scale storage power capacity are New York, Hawaii, and 

Georgia, with most of this capacity installed in the commercial sector, as shown in Figure 10. Little smallscale storage power capacity in the industrial sector exists outside of California. In the residential sector, 

small-scale storage is available in other states, especially in Virginia, Hawaii, Ohio, Texas, and Louisiana.

Figure 10. U.S. Small-Scale Energy Storage Capacity Outside of California by Sector (2016)

power capacity 

megawatts

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

Small-scale energy storage system ownership is typically discussed in terms of the end-use sector. 

Direct-connected storage systems are installations not located at an ultimate customer’s site but rather

in front of the meter and/or connected directly to a distribution system. In Michigan, DTE Electric 

Company is reporting the largest amount of direct-connected battery storage power capacity. They

operate 21 community energy storage systems, which include 18 25-kW (50-kWh) storage units, a 500-

kW battery storage device integrated with a 500-kW solar system, and two energy storage systems using 

repurposed electric vehicle batteries.19

The data collected for small-scale applications depend on the electric utility’s access to information

about installations in their territory. If end-users of storage systems are installing systems for purposes 

where the system would not interact with the distribution network—for example back-up applications—

the distribution utility may not have knowledge of those system installations. Utilities also collect 

information on small-scale storage systems primarily through inter-connection agreements. Because 

these agreements are designed by the utilities, the information about storage units may not be collected 

in a consistent format across all utilities. 

 19 DTE Energy, DTE Energy Advanced Implementation of Energy Storage Technologies (Detroit, MI: DTE Energy, 2015), 

https://www.smartgrid.gov/files/OE0000229_DTE_FinalRep_2016_03_16.pdf.

0.0 0.5 1.0 1.5

rest of U.S.

Texas

Ohio

Virginia

Florida

Illinois

Utah

Michigan

Georgia

Hawaii

New York

residential 

commercial 

industrial 

direct 

connected

0.0 0.5 1.0 1.5

Louisiana

Texas

Ohio

Hawaii

Virginia

residential

0.0 0.5 1.0 1.5

Illinois

Utah

Hawaii

Georgia

New York

commercial
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 17

Market and Policy Drivers

As discussed previously, battery storage is physically capable of serving many applications, each with 

benefits for one or more participants in the electricity system, including transmission and distribution 

system operators, generation resources, and consumers. However, the functional ability of storage to 

serve these applications can be limited or not well defined under existing market rules and other 

policies. This situation has begun to change as the technology has matured and the industry 

stakeholders in some regions have gained experience financing, procuring, and operating storage 

installations. Most of the activity has been led by wholesale market operators and state-level regulators.

Wholesale Market Rules

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

optimize supply and demand bids for wholesale electric power. They are technology neutral and must 

ensure market rules do not unfairly preclude any resources from participating, 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 

producer of electricity. However, recent actions by FERC ISOs/RTOs have begun to carve a path for 

storage to participate in their markets. 

A notable example is FERC Order 755, issued in 2011, which required ISO/RTO markets to provide 

compensation to resources having the ability to provide faster-ramping frequency regulation. As a result

of Order 755, PJM split its frequency regulation market into two services: a fast-ramping service and a 

slower-ramping service. By the end of 2015, more than 180 MW of large-scale battery storage capacity

had come online in the PJM territory. However, PJM began observing operational issues in its frequency 

regulation market structure and has since changed its frequency regulation signals. Installations of largescale battery storage in the region have plateaued since PJM made these changes.

Other system operators have implemented relevant changes to market rules, including developing 

unique asset classes for storage, specifying participation models, lowering minimum size requirements, 

allowing for aggregation, and defining duration requirements. However, these regions have not seen 

large-scale battery storage deployment at the same level as PJM. In February 2018, FERC issued Order 

No. 841 requiring system operators to remove barriers to the participation of electric storage resources 

in the capacity, energy, and ancillary services markets. Each ISO/RTO must revise its tariff to include 

market rules that recognize the physical and operational characteristics of electric storage resources. 

State-Level Policy Actions

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

storage have been limited20 and most policy actions involving energy storage have been at the state 

level. State-level policy actions include setting procurement mandates, establishing incentives, and 

requiring incorporation of storage into long-term planning mechanisms.

 20 One exception to this 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.
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 18

Policy Actions in California

To date, California has introduced the most measures related to energy storage. In 2013, the California 

Public Utility Commission (CPUC) implemented Assembly Bill 2514 by setting a mandate for its investorowned utilities to procure 1,325 MW of energy storage across the transmission, distribution, and 

customer levels by 2020. All of the capacity must be operational by 2024. In May 2017, CPUC 

implemented Assembly Bill 2868 by ordering its investor-owned utilities 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 

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

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

More than 60% of the existing battery storage power capacity in California was installed in response to a 

leak at the Aliso Canyon Natural Gas Storage Facility outside Los Angeles in October 2015. In May 2016, 

to help address reliability risks due to constraints on natural gas supply, CPUC authorized the Southern 

California Edison electric utility to hold an expedited solicitation for energy storage. By December 2016, 

62 MW of battery storage capacity was added to the system. CPUC also expedited ongoing procurement 

of 38 MW of battery storage by San Diego Gas and Electric21, which was installed in early 2017.

Policy Actions in the Rest of the United States

As of May 2018, three states besides California have also set energy storage mandates or targets. In 

2015, Oregon passed a law directing two electric utilities to each procure 5 MWh of storage energy 

capacity by 2020. In June 2017, the Massachusetts Department of Energy Resources set an energy 

storage target of 200 MWh by 2020. And, in January 2018, New York announced a target of 1.5 GW of 

energy storage by 2025. In addition, some states, such as Nevada, allow storage systems to be included 

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

energy storage including grants, support for pilot projects, and tax incentives. In 2018, Maryland began 

to offer a tax credit of 30% on the installed costs for residential and commercial systems. 

Many states require utilities to produce integrated resource plans 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 these plans can be a challenge 

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

storage has unique operational constraints, can be interconnected at various points throughout the 

system, can serve a variety of applications, and is faced with a shifting landscape of policies and 

regulations that may affect system profitability. Nonetheless, some states have begun to require utilities 

to include storage in integrated resource plans, including Arizona, California, Connecticut, Colorado, 

Florida, Indiana, Kentucky, Massachusetts, New Mexico, North Carolina, Oregon, Utah, Virginia, and 

Washington. New York and Vermont include storage in their state energy plans22.

 21 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

22 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/
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 19

Future Trends

As of December 2017, project developers report to EIA that 239 MW of large-scale battery storage is 

expected to become operational in the United States between 2018 and 2021. Given the short planning 

period required to install a storage facility, the reported planned capacity does not necessarily reflect 

the entirety of builds over this period, but the estimates can be used as an indicator of trends. 

California accounts for 77% of planned large-scale battery storage currently reported. In 2013, California 

set an energy storage mandate (Assembly Bill 2514), which requires its investor-owned utilities to install 

1,325 MW of energy storage across the transmission, distribution, and customer levels by 2024. (See the 

section on market and policy drivers for more information.) 

The Annual Energy Outlook (AEO), provides projections to 2050 on the supply and demand needs for 

energy markets in the United States. The 2018 AEO report was the first year to include operational or 

capacity projections of energy storage outside of pumped hydroelectric storage in the model results. 

The Reference case, which assumes implementation of current U.S. laws and policies, projects largescale wind capacity growth of 50 gigawatts (GW) and large-scale solar photovoltaic capacity growth of 

nearly 150 GW by 2050. Over this same period, large-scale battery storage capacity is projected to grow 

to 40 GW, as shown Figure 11. In the longer term, wind and solar growth are projected to support 

economic opportunities for storage systems that can provide several hours of storage and enable 

renewable generation produced during the hours with high wind or solar output to supply electricity at 

times of peak electricity demand.

Figure 11. U.S. Large-Scale Wind, Solar, and Battery Storage Capacity Projections (2020–2050)

power capacity 

gigawatts

Source: U.S. Energy Information Administration, Annual Energy Outlook 2018

Challenges exist when modeling energy storage technologies in long-term planning models. Because 

these models are designed to deliver multi-decade results, simplifications in the structure of the model

often occur. One simplification that has significant consequences for the representation of energy 

storage technologies is the temporal resolution of the model. AEO2018 included energy storage as a 4-

0

20

40

60

80

100

120

140

160

180

2020 2030 2040 2050

wind

0

20

40

60

80

100

120

140

160

180

2020 2030 2040 2050

solar photovoltaics

0

20

40

60

80

100

120

140

160

180

2020 2030 2040 2050

large-scale battery storage
May 2018

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

hour battery system that can be utilized to 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 

for many long-term planning models. As a result, the AEO projections shown do not represent all of the 

available storage technology options nor the full suite of applications that storage can serve. See the list 

of possible applications for storage in an earlier section of this report.

EIA is collaborating with other modeling entities on a multi-model comparison23 to enhance the 

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

wind, solar, and energy storage. The representation of battery storage in the AEO will continue to 

develop as the markets and applications for energy storage evolve.

 23 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.
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 21

Appendix

Appendix A: Applications Additional Figures..............................................................................................22

Appendix B: Other Storage Technologies...................................................................................................25
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 22

Appendix A: Applications Additional Figures 

This appendix includes additional figures illustration the selected use cases for energy storage in the existing fleet. 

Figure 12. Applications Served by U.S. Large-Scale Battery Storage (2016)

power capacity

megawatts

energy capacity 

megawatthours

Note: Each column represents a single-battery installation, and filled boxes indicate which application(s) it served in 2016.

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

0 100 200 300 400 500 600 700

co-located renewable firming

transmission and distribution deferral

backup power

arbitrage

excess wind and solar generation

load management

system peak shaving

load following

voltage or reactive power support

ramping / spinning reserve

frequency regulation

megawatts

0 100 200 300 400 500 600 700

co-located renewable firming

transmission and distribution deferral

backup power

arbitrage

excess wind and solar generation

load management

system peak shaving

load following

voltage or reactive power support

ramping / spinning reserve

frequency regulation

megawatthours

PJM 

CAISO 

ERCOT 

MISO 

ISO-NE 

AK/HI 

Other

PJM 

CAISO 

ERCOT 

MISO 

ISO-NE 

AK/HI 

Other
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 23

Figure 13. U.S. Large-Scale Battery Storage Capacity and Applications Served (2016)

power capacity

megawatts

Note: The figure does not include a 10 MW/7.5 MWh battery storage unit located in Maui, Hawaii, which did not report any 

applications in 2016.

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

PJM

CAISO

ERCOT

MISO

ISO-NE

AK/HI

Other
May 2018

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

Figure 14. U.S. Large-Scale Battery Storage Capacity and Applications Served (2016)

energy capacity 

megawatthours

Note: The figure does not include a 10 MW/7.5 MWh battery storage unit located in Maui, Hawaii, which did not report any 

applications in 2016.

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

PJM

CAISO

ERCOT

MISO

ISO-NE

AK/HI

Other
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 25

Appendix B: Other Storage Technologies

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

storage can take other forms including electrical, thermal, and mechanical. Electrical energy storage 

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

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

compressed-air energy storage (CAES). 

To date, large-scale thermal storage has only been utilized in conjunction with solar thermal power 

plants. These systems take the excess energy produced during the day to heat salt or other materials 

that can be used later to power a steam turbine. Two large-scale solar thermal systems with storage are 

currently operating in the United States. The 280 MW Solana Generating Station in Arizona was installed 

in 2013, and the 125 MW Crescent Dunes facility in Nevada was installed in 2015. Thermal storage can 

also be utilized as a distributed energy resource, for example, by chilling water overnight to use for 

space cooling during summer days.

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. Figure 15 illustrates that, although the

United States has significantly more operating hydroelectric pumped storage than battery storage, most 

of it was installed in the 1970s and early 1980s. California, Virginia, and South Carolina account for the 

largest shares of existing U.S. hydroelectric pumped storage capacity. The largest single facility in the 

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

Figure 15. U.S. Hydroelectric Pumped Storage Capacity (1960–2017)

power capacity 

gigawatts

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

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

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-

2017

cumulative 

annual additions cumulative capacity
May 2018

U.S. Energy Information Administration | US. Battery Storage Market Trends 26

United States: a 20 MW system in New York, a 20 MW system in Pennsylvania, and a 2 MW system in 

Alaska. One flywheel system, the 20 MW Energy Nuevo Storage Farm, is expected to be installed in 

California in 2020.

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. 

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

2020.

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

deployment in large-scale grid applications.