Energy storage deployment across North America broke records in 2024, driven by falling battery prices, increased system efficiencies, and growing market opportunities. Globally, energy storage deployment increased by 53% last year.
As we look ahead to 2025, the North American energy storage sector is poised for another transformative year. Nationwide, we’re seeing a robust project pipeline, advancements in software optimization, and expanding state-level incentives, all of which promise to accelerate energy storage deployment.
Like any sector, the energy storage sector is not without its challenges; headwinds for the sector include the lack of availability of “domestic content,” interconnection bottlenecks, and potential fluctuations in support for clean energy incentives. Yet, these challenges also present opportunities to strengthen domestic manufacturing, streamline the regulatory processes, and accelerate development.
In this blog, we’ll explore what lies ahead for North America’s energy storage market in 2025 and how Convergent Energy and Power (Convergent) continues to lead the way in delivering more reliable, cost-effective, and sustainable solutions for businesses and utilities alike.
Quick Review: Energy Storage 101 (skip if you know this already!)
Energy storage systems allow electricity to be stored—and then discharged—at the most strategic times. Today, Lithium-ion batteries, the same batteries that are used in cell phones and electric vehicles, are the most commonly used type of energy storage. Like the batteries in your cell phone, industrial-scale and utility-scale battery energy storage systems can be charged with electricity from the grid, stored, and discharged when there is a deficit in supply or when energy is most expensive.
Increasingly, battery storage systems are being paired with solar photovoltaics (PV), known as solar-plus-storage.
Batteries do not generate power; batteries store power. As a result, knowing when to charge and discharge a battery storage system is critical. In most cases, this means charging when energy is least expensive and discharging when energy is most expensive.
2024 in Review: Energy Storage Milestones
2024 marked a landmark year for energy storage across the United States, with the sector experiencing unprecedented growth. Grid-scale energy storage led the charge (so to speak!), significantly contributing to grid stability during extreme weather events, while also helping to meet surging demand. This growth was fueled by the rapid expansion of energy storage deployments across multiple states, predominantly in Texas and California. Both Texas and California now exceed 10 GW, enhancing grid resilience and responding to the challenges posed by climate events.
This year’s success wasn’t confined to utility-scale systems; there was significant growth in behind-the-meter and industrial energy storage applications . As businesses faced rising energy costs, many turned to energy storage solutions to manage demand charges, reduce those costs, and advance their clean energy goals.
In addition, lithium-ion battery pack prices saw a remarkable 20% reduction year-over-year, with the average price dropping to $115/kWh. Further, technological advancements in energy storage technologies can enable energy storage systems to meet a wider array of needs, from short-duration peak shaving to long-duration resilience applications.
What to Expect from Energy Storage in 2025
As we approach 2025, the energy storage sector is poised for significant growth, driven first and foremost by increasing demand for grid-scale energy storage solutions, reinforced by innovation in energy storage technologies, and utility, state, and federal incentives. Here's a look at what we can expect:
📈 More Grid-Scale Energy Storage: The demand for large-scale battery energy storage systems is expected to continue growing, particularly in key U.S. states like Texas, California, and Nevada, where integrating renewable energy is essential. With the approval of FERC Order No. 2023, which streamlines the interconnection process, energy storage systems are expected to come online more quickly and efficiently across the U.S.
🔋 Battery Costs Continue to Fall: Battery pack prices in the U.S. are expected to keep dropping, with average costs already decreasing by 20% in 2024 to $115/kWh. This trend is largely driven by increased domestic manufacturing and the adoption of cost-effective battery chemistries such as lithium iron phosphate (LFP). By 2025, battery prices could dip below $100/kWh, making energy storage an even more cost-effective solution.
🏛️ Tailwinds of the IRA: The Inflation Reduction Act (IRA) helps accelerate record-setting growth in energy storage deployment and climate change mitigation measures by providing an investment tax credit for standalone energy storage. Prior to this, energy storage was only eligible for the investment tax credit when paired with solar PV, also known as solar-plus-storage. While the IRA may get some nips and tucks in 2025, we expect it to continue in some form.
🌎 Geopolitical Challenges and Supply Chain Dynamics: The U.S. energy storage industry will continue to face geopolitical challenges, including trade dynamics and tariff negotiations, particularly concerning the supply of key components like LFP batteries from China. These issues will likely influence procurement strategies for energy storage integrators in North America. Energy storage developers will need to balance cost-effective sourcing with the necessity of complying with local manufacturing incentives, ensuring that domestic supply chains remain resilient and avoiding disruptions.
📝 Federal Permitting Reform Accelerates Deployment: One of the most significant changes anticipated in 2025 is the acceleration of federal permitting reforms. The U.S. government is expected to streamline permitting processes for clean energy systems, including energy storage, which would reduce delays and accelerate deployment.
Looking Ahead: Convergent’s Vision for 2025 … Join Us?
As we move into 2025, Convergent is at the forefront of bringing strategic industrial-scale and utility-scale energy storage systems online, reinforcing our commitment to providing more reliable, cost-effective, and sustainable electricity for our customers.
Convergent's new 1.75 MW / 8.4 MWh battery storage system in Little Orleans, Maryland
By addressing challenges like supply chain constraints and interconnection processes, Convergent is poised to continue delivering efficient, scalable solutions that meet rising energy demands. Those demands are largely driven by accelerating load growth tied to electrification, the massive rise of data centers, urbanization, and more. In fact, we anticipate building as many systems in the next few years as we have in the past decade!
For over a decade, Convergent has gained deep expertise by working closely with businesses, communities, and utilities to take the hassle out of on-site renewables by financing, building, owning, and operating these systems on our customers’ behalf.
Schedule a free, no-obligation introductory call with our team today to explore how we can support your energy goals.
