U.S. battery storage surge reshapes grid as demand soars 25% by 2035

A $1 trillion “supercycle” of investment in battery energy storage systems (BESS) is expected to reshape the U.S. electric grid and power generation landscape as renewable energy integration accelerates [1]. Over the past decade, large-scale battery storage was considered a distant solution to the intermittency of solar and wind power. However, rapid technological advancements and cost declines—lithium-ion battery prices have dropped by 75% in ten years—have positioned batteries as a key enabler for both renewables and grid stability [1].

Battery storage now offers a viable solution to store excess power during off-peak hours and dispatch it when demand surges or renewable supply wanes. Nearly half of all battery projects are co-located with solar or wind farms, reinforcing the symbiotic relationship between these technologies [1]. With the U.S. adding 10.4 GW of battery capacity in 2024—second only to China—the trajectory is clear: by 2030, installed capacity could reach 120–150 GW [1].

The Department of Energy projects nearly 19 GW will be added in 2025, although uncertainty around tariffs may cause a short-term slowdown [1]. The evolving tax credit environment also favors battery storage over wind and solar, which will lose incentives after 2027. This shift is influencing development strategies, with some developers now prioritizing battery systems and pairing them with solar rather than the other way around [1].

Industry leaders anticipate a surge in grid-scale battery demand driven by increasing electricity consumption. According to the International Energy Agency, domestic electricity demand is projected to rise by 25% between 2023 and 2035, with hyperscalers like Amazon, Google, and Microsoft investing $75–100 billion each in data center infrastructure in 2025 alone [1]. These centers require vast amounts of reliable power, further fueling the need for storage to manage fluctuations and stabilize the grid.

The geopolitical dimensions of battery production are also intensifying. Companies are shifting supply chains away from China, sourcing materials and manufacturing within the U.S. to align with national security and self-sufficiency goals. For instance, Peak Energy is developing sodium-ion batteries using U.S.-sourced materials, while Lyten is building a lithium-sulfur “gigafactory” in Nevada and recently acquired Northvolt’s operations in Poland [1].

Industry experts argue that battery storage is becoming as essential to national infrastructure as military technology. “We don’t outsource F-16 manufacturing to another country,” said Cameron Dales of Peak Energy. “It’s a similar dynamic in batteries,” he added [1]. This sentiment underscores the growing consensus that control over energy storage infrastructure is vital for energy security and economic resilience.

As the grid faces mounting pressure from declining gas turbine availability and delayed nuclear projects, renewables and batteries will dominate new power generation for the remainder of this decade [1]. While costs are declining and domestic production is ramping up, challenges remain. Supply chains must evolve to meet surging demand, and further cost reductions—especially for next-generation battery chemistries—will determine the long-term success of this transition [1].

The battery storage boom is not just about meeting rising power needs—it’s about redefining how electricity is generated, stored, and distributed. In a world where tax credits are becoming scarcer, maximizing the value of every electron produced will be essential [1]. And with demand showing no signs of slowing, the supercycle is not just arriving—it is already underway [1].

Source: [1] Electric grid battery storage ready for boom as insatiable demand for power surges (https://fortune.com/2025/08/01/electric-grid-battery-storage-ready-boom-insatiable-demand-power/)