US Battery Storage Hits Record 58 GWh Despite DOE Funding Cuts

A record year in an unfriendly climate

The US energy storage industry installed 57.6 gigawatt-hours of new capacity in 2025, the largest single-year addition on record, according to a market outlook from the Solar Energy Industries Association (SEIA) and Benchmark Mineral Intelligence.2 That is about 30% above the previous record, set in 2024, and roughly four times what the industry installed three years earlier.2 Cumulatively, the US now has about 137 GWh of utility-scale storage, 19 GWh of commercial and industrial storage, and 9 GWh of residential systems.2

The timing is notable. In the same year, the Department of Energy rescinded roughly $7.56 billion in funding across 223 clean energy projects. The cuts hit direct air capture, green hydrogen and offshore wind, including the South Texas DAC Hub led by Climeworks and wind projects tied to Ørsted.1 The two stories sit side by side for a reason. Federal policy turned sharply against clean energy, yet grid batteries had their best year ever.

Why storage held up

E&E News, reporting on the same SEIA–Benchmark data, points to several forces behind the surge.4 State policies kept procurement moving. AI-driven data centers are pushing electricity demand higher. New renewable capacity needs firming. Developers also rushed to finish projects before "foreign entity" restrictions in the Republican budget law take effect.4 That last factor matters for interpreting the numbers. Some of 2025's volume was likely pulled forward to beat a regulatory deadline, so a portion of the record may reflect timing rather than lasting momentum.

Benchmark's head of research, Iola Hughes, called it a "new phase of sustained, high volume-deployments," with storage helping meet peak demand, damp price swings and improve resilience.4 SEIA framed the report around reliability and keeping energy prices down.2 Those arguments work across party lines in a way carbon removal often does not.

The global picture supports the idea that this is structural. Citing the International Energy Agency, one market analysis reports that about 108 gigawatts of battery capacity came online worldwide in 2025, up 40% from 2024. That annual figure exceeds the historical peak for gas-fired additions, about 107 GW in 2002.3 Lithium iron phosphate chemistry made up roughly 90% of those deployments.3 The US and global figures use different units, energy (GWh) versus power (GW), so they can't be compared directly. Both point the same way, though.

Carbon capture takes the harder hit

Carbon removal and hard-to-abate industrial projects face a different situation. Those technologies leaned more heavily on federal grants from the Bipartisan Infrastructure Law and the Inflation Reduction Act. They had not yet reached commercial scale, and they have few near-term revenue streams that don't depend on policy.1 The DOE terminated 321 financial awards in total. That count is higher than the 223-project tally because several awards can attach to a single project.1

Private capital is filling some of the gap. Cement startup Brimstone lost a $189 million DOE grant but says it is building its first plant anyway.5 United Airlines' venture arm has invested in Heirloom, which uses limestone to pull CO2 from the air.5 Carbon removal firms have also raised $80 million from backers in tech and finance, money that arrived ahead of expected cuts to federal carbon-capture support.5 These are meaningful signals, but they are small next to the billions that were withdrawn.

The reading

The gap between these sectors tracks how close each technology is to paying for itself. Grid batteries have mature supply chains and a dominant chemistry. They earn money directly by shifting power to peak hours and selling grid services, and utilities and data center developers want them regardless of who is in Washington. A related analysis expects demand for storage management software to grow alongside the hardware, another sign of a maturing market.3 Direct air capture and green hydrogen are still at a stage where public money decides whether projects proceed.

Storage still faces risks. Tariffs, permitting delays and the foreign-entity rules all threaten a supply chain that depends heavily on Chinese components.4 Growth may slow once the pre-deadline rush works through the pipeline.

Still, 2025 showed that federal hostility does not affect every climate technology equally. Technologies that already solve a commercial problem kept growing. Those that still depend on policy support are now looking to private investors.