The global energy storage market will see a decade of sustained, rapid growth and reach 3.1TW cumulative capacity by 2036, according to BloombergNEF (BNEF).
The research provider published the second-half 2026 (H2 2026) edition of its Energy Storage Market Outlook report today, forecasting a 45% year-on-year growth in deployments from last year.
That means 2026 will be another record-breaking year in which BNEF is expecting 188GW/535GWh of deployments. Last year’s record of 112GW/307GWh came despite a slowdown in global solar PV and wind additions. BNEF’s forecasts exclude pumped hydro energy storage (PHES) capacity.
The forecast is also an upward revision from BNEF’s earlier estimate of 158GW/459GWh for the year, issued in the H1 2026 edition of the report. Around this time last year, the firm had offered a forecast of 92GW/247GWh for 2025, finding the real numbers to be considerably higher after the year was over.
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This edition also captures the increasing role of energy storage in the seemingly inexorable rise of data centres. Data centres are such a ubiquitous topic that BNEF has, for the first time, included on-site energy storage for data centre applications in its US deployment forecast.
This is, however, included under ‘end-user’ forecasts, while battery backup (BBU) and uninterruptible power systems (UPS) are excluded, and power purchase agreements (PPAs) for co-located energy storage at data centres are included in the utility-scale forecasting.
BNEF found that 0.5GW/1.4GWh was deployed as on-site energy storage for data centres in 2025 and forecasts this to increase to 4.9GW/7.4GWh this year. That will increase to 6.3GW/8.4GWh in 2027, but BNEF expects next year to represent a peak.
Major contributors and emerging markets
According to BNEF, the next decade of growth comes as the adoption of energy storage spreads beyond established markets. While mainland China, the US and Australia will account for 62% of additions, India is expected to deploy more than 6GW this year. The research firm expects the UK and Germany to also be major contributors.
Meanwhile, 2027’s forecast of 209GW/638GWh will include accelerated buildout numbers from emerging markets such as Spain, the UAE, Chile, and Japan.
In 2025, China and the US together accounted for 70% of all deployments, meaning their share will decrease slightly as the rest of the global market grows.
Revising a previous estimate issued six months ago upwards by 8%, BNEF predicted that global cumulative installed capacity, at 3,098GW/11,106GWh, will be 10 times the 307GW/747GWh that is reached by the end of 2025.
Lithium cost increases, solar co-location and protectionist policies: three key global trends
BNEF identified three dominant industry and market trends: the rise of protectionist and supply chain policies, which the US has been the “most aggressive” among governments in pursuing; the increasing deployment of battery energy storage systems (BESS) co-located or in hybrid configuration with solar PV; and the rising price of lithium.
Lithium prices have been rising since the latter part of 2025, multiplying tenfold since October last year to reach US$11.5/kWh by May 2026. Meanwhile, the price of lithium iron phosphate (LFP) BESS cells in China has more than doubled in that time, with LFP materials comprising roughly half the cost of a complete system.
The US is by no means alone in implementing trade protectionist policies while working to promote domestic supply chains and production: other countries have also made moves in this direction.
In other words, governments are seeking to stimulate domestic production and reduce reliance on foreign imports and assistance, particularly when such assistance comes from a nation deemed an adversary—as in the case of the US with Chinese battery imports.
The US One Big Beautiful Bill Act (‘OBBA’) signed by President Trump kept investment tax credit (ITC) and production tax credit (PTC) incentive schemes introduced under the Biden-Harris administration in place but placed new restrictions on projects and factories benefiting from foreign entity of concern (FEOC) assistance over a certain threshold.
Import tariffs, which for Chinese batteries were already set to rise under Biden-era policies, were further increased as the US imposed new Section 301 tariffs on imports.
Additionally, foreign-made inverter equipment is required to come from a Federal Communications Commission-approved list, and an Executive Order made in August further prohibited the installation of bulk power system equipment, including power conversion systems (PCS), transformers and BESS.
The European Union (EU) and Japan, meanwhile, made similar moves pertaining to cybersecurity and the restriction or controlled importation of foreign power electronics, while also introducing domestic content policies.
India, South Korea and Brazil have all implemented policies designed to incentivise production and utilisation of domestic content.
Unsurprisingly, China leads the world in the trend of co-locating BESS with renewables, predominantly solar. Of a global total of 69.3GW/195.6GWh of operational utility-scale energy storage co-located with 303.6GW of solar PV capacity as of the end of 2025, in gigawatt terms, around 61% was in China, which had achieved 42.4GW/109.8GW of new storage additions co-located with 244GW of solar.
The other leading countries for solar-plus-storage co-location or hybridisation are the US, Australia, and Chile as seen in the chart.
However, a growing number of countries, including India, the Philippines and Vietnam have introduced mandates to promote the co-location or integration of solar and storage, BNEF said.
