VINACHEM

The US energy storage market is at risk of shrinking 29% next year if Republican lawmakers move forward with severe cuts to tax credits for the technology, according to a report from Wood Mackenzie and a clean-power lobbying group.

Uncertainty around tariffs and policy has paused decision-making for utility-scale battery projects originally scheduled to start up in 2026, said Allison Weis, Wood Mackenzie’s global head of energy storage, power and renewables. While the current Senate version of President Donald Trump’s fiscal package softens the blow to the industry, the exact impact is still unclear, she said.

“We see a contraction in 2026 across all scenarios,” Weis said. “We’ve seen the pipeline for 2026 has already declined 14% since Trump’s inauguration.”

Grid-scale storage installations have surged in the US after former President Joe Biden’s Inflation Reduction Act provided tax incentives for the clean-power industry, including batteries. But the sector is under threat from Trump’s tariffs and his energy policies, which favor fossil fuels over renewables. The US is heavily reliant on China for battery materials.

Fluctuating tariff rates have limited battery procurement from China throughout the first quarter of this year and well into the second quarter, according to the Wood Mackenzie report, which was developed with the American Clean Power Association. Still, utility-scale storage is poised to grow by a record 22% this year, the report said.  – Source: Bloomberg