Texas Set to Eclipse California in Battery Storage as US Grid Capacity Surges 30%
The United States installed 57 gigawatt hours of new energy storage capacity in 2025, marking a 30% jump from the prior year and positioning battery infrastructure as an unexpected bright spot in an otherwise hostile regulatory environment for renewable energy.
The growth matters for corporate finance leaders because it signals a fundamental shift in how utilities are planning for electricity demand—particularly in states like Texas, where the Solar Energy Industries Association predicts battery storage will overtake California's capacity this year. For CFOs managing data centers, manufacturing facilities, or any energy-intensive operations, the battery boom represents both grid reliability improvements and potential cost arbitrage opportunities as storage systems smooth out peak pricing.
The numbers come from a SEIA report published Monday, which follows similar findings from Bloomberg New Energy Finance last week. The association projects another 21% increase in 2026, adding 70 gigawatt hours of new storage capacity. To put that in perspective: less than a decade ago, the entire US grid had roughly half a gigawatt of total storage capacity. We've gone from rounding error to material infrastructure in under ten years.
Here's the interesting bit: batteries survived the political gauntlet largely intact. The "One Big Beautiful Bill" passed last summer gutted tax credits for wind and solar—the usual suspects in renewable energy debates—but left battery storage incentives mostly untouched. That's partly because batteries don't carry the same political baggage (they're just storage, after all), and partly because Republican lawmakers with energy projects in their districts pushed back against broader cuts.
The result is a peculiar dynamic where the policy environment is openly hostile to renewables while the actual infrastructure keeps expanding. Texas exemplifies this contradiction. The state's deregulated grid—which operates closer to a pure market system than most US grids—saw solar meet more than 15% of summer demand in 2025, beating coal for the first time. Jigar Shah, managing partner at advisory firm Multiplier and former director of the Department of Energy's Loan Programs Office, notes that Texas's independent grid structure has effectively enabled solar and battery growth through market forces rather than policy mandates.
For finance leaders, the Texas trajectory is worth watching. The state's grid operates on tighter margins than most, which means storage economics work differently there—batteries can capture more value by charging during low-demand periods and discharging during peak hours. If Texas overtakes California in storage deployment this year as SEIA predicts, it suggests the business case for batteries has matured beyond subsidy-dependent markets.
The SEIA report claims current storage capacity could power more than five million homes annually, though that figure depends heavily on usage patterns and discharge rates. More relevant for corporate planning: utilities are clearly betting on storage as the answer to rising electricity demand, whether from AI data centers, manufacturing reshoring, or electric vehicle charging infrastructure.
The question for 2026 is whether the 21% growth projection holds if federal policy turns more aggressively against clean energy infrastructure. Battery credits survived the first round of cuts, but they're not immune to future legislation. For now, the market seems to be moving faster than the politics—which is either reassuring or concerning, depending on your capital planning timeline.
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