No future quarterly declines predicted for US energy storage installation market

The U.S. battery storage market hit a record 18.9 GWh installed in the second quarter of 2026, according to a new report from the American Clean Power Association and Wood Mackenzie. Home battery installations (the residential sector) reached 676 MW, the fourth-largest quarter on record, though that was down 15% from the previous quarter. California, Texas, Puerto Rico, Arizona and Illinois remain the top markets for home batteries, together making up 88% of residential storage installed in the quarter, but all five saw declines compared to the prior quarter.

Looking ahead, the report projects the residential storage market will shrink about 4% in 2026, due to the elimination of a federal tax credit, homeowner hesitation, and shifts in how companies offer battery leasing or ownership deals. After that, the market is expected to rebound, growing at an average of 9% a year between 2027 and 2031.

One trend worth noting for homeowners: pairing solar panels with battery storage is becoming more common. Nationally, 46% of residential solar installations in the second quarter included a battery, up from 41% a year earlier. That suggests more homeowners installing solar are choosing to add storage at the same time, even as the overall battery market cools this year. Battery prices, meanwhile, continue to trend downward across the industry, which could help offset some of the near-term slowdown for homeowners considering a system.