Booming Residential Energy Storage Market: A 63% Quarter-on-Quarter Surge

A recent study from the esteemed research organization Wood Mackenzie Power and Renewables paints an optimistic picture of the U.S. residential energy storage landscape. According to the US Energy Storage Monitor, residential energy storage made an impressive 63% leap in the third quarter, amassing a total of 346 MW, a noteworthy increase from Q2 results. Arizona and North Carolina lead the way with growth rates of 73% and a whopping 100%, respectively.

Moreover, the states of Texas and California hold significant influence, monopolizing 93% of all MW and total MWh of installed capacity.

Predictions Beyond 2025: A Steady Growth Amid Challenges

The Wood Mackenzie team has made an intriguing forecast, anticipating a steady expansion of energy storage projects from 2025 forward. While a slight dip of 5% is predicted for 2024, following years are nevertheless expected to see deployments at an impressive volume of 11.9GW/34.4GWh. Astoundingly, storage growth in the community, commercial, and industrial sectors could almost reach 300% over the next five years, totalling a cumulative installed impact of 63.7GW/222GWh.

However, the northeastern region of the US is expected to face interconnection issues, a looming challenge identified in the report.

Also Read: Residential Energy Storage Market Trends 2025

The Lingering Effects of the Presidential Election

The recent presidential election continues to color projections on the Battery Energy Storage Systems (BESS) market. Wood Mackenzie warns of the potential consequences of proposed import duties. According to their report, tariffs varying from 7.5–25% on lithium batteries, coupled with a broad 60% tariff on Chinese imports, could elevate costs significantly.

With domestic supply struggling to match demand, storage expenses could soar to around $1.2/kWh. In the most unfavorable scenario, production tax credits could be phased out three years ahead of schedule, exiting in 2029 instead of 2032, with concurrent removal of gas emission targets.

Most ESS battery production comes from countries that could face increased tariffs. These potential penalties, along with any potential dissolution of domestic manufacturing incentives, could drive up prices significantly. This could trigger a sharp fall in annual installations after the initial surge. An updated forecast considering these variables will be provided by Wood Mackenzie in Q1/2025.

ACE Battery: A Key Player in Energy Storage Manufacturing

As a prominent energy storage system (ESS) manufacturer, ACE Battery remains committed to supporting the growing demand for residential, commercial, and industrial storage solutions. With a robust OEM/ODM capability and a strong focus on innovative lithium battery technology, ACE Battery continues to provide high-performance storage solutions that align with the evolving U.S. market dynamics.

With an updated Wood Mackenzie forecast expected in Q1 2025, ACE Battery and other industry leaders will closely monitor policy shifts, tariff implementations, and domestic manufacturing incentives to navigate potential cost fluctuations and market challenges.