The global energy storage market is undergoing a transformative phase, with countries like China and the US leading the charge. In 2025, China accounted for over half of the global additions, making it a dominant player in this sector. Meanwhile, the US contributed 16% to the global share. Australia’s energy storage deployment witnessed a significant increase, nearly six times that of the previous year, thanks to favorable market conditions and new residential storage subsidies. Saudi Arabia also made notable progress, benefiting from Chinese suppliers entering the market.
Energy storage additions are steadily catching up with solar capacity, marking a significant shift from a decade ago. By 2025, for every 6 megawatts of solar capacity added, 1 megawatt of batteries was installed, a considerable improvement from 2016’s ratio of 56:1. Projections for 2026 indicate this gap will narrow further to 4:1, as energy storage continues to grow despite a slowdown in solar additions.
BloombergNEF (BNEF) forecasts robust growth in the energy storage sector over the next decade. The decline in costs, increased penetration of renewables, mandates for co-location, auctions, and emerging applications like data centers and EV charging are expected to drive annual additions past 300 gigawatts by 2036.
The Iran Conflict’s Limited Impact on Energy Storage
While the Iran conflict’s direct effects on energy storage markets remain minimal, China’s stronghold on battery supply chains plays a crucial role. However, the surge in fossil fuel prices could have several consequences. High intraday power spreads, spurred by rising fuel costs, may enhance revenue for energy storage in competitive markets. Moreover, if the conflict persists, leading to higher retail electricity prices, more consumers might turn to solar and battery installations to cut grid dependency, similar to Europe’s response to the Ukraine crisis.
There are concerns that soaring oil prices could increase shipping and manufacturing costs, potentially raising project expenses. The sector’s growth will likely be region-specific, influenced by each market’s approach to energy security and conflict duration.
Emerging Trends in Energy Storage Chemistry
Lithium-ion batteries, particularly lithium iron phosphate (LFP), have led the chemistry share for storage, with over 90% of annual additions in 2025. However, this trend is set to evolve. In 2026, long-duration energy storage (defined as six hours or longer) is expected to quadruple to two gigawatts, primarily driven by non-lithium-ion technologies, with significant growth in China. Policy mandates and procurements in various markets support this shift.
Sodium-ion batteries are anticipated to gain traction in the stationary storage arena. Although currently more expensive than lithium-ion options due to limited scale, the abundant availability of sodium materials and economies of scale could reduce costs over time. Several technology providers have secured sodium-ion supply deals across markets. In April, Contemporary Amperex Technology Co. (CATL) and Beijing HyperStrong Technology Co. signed a three-year partnership for 60 gigawatt-hours of sodium batteries. Additionally, US-based Peak Energy announced a 5-gigawatt-hours supply agreement with Jupiter Power for deployment between 2027 and 2030.
BNEF Clients can access related content below:
Energy Storage Market Outlook 1H 2026
2026 Long-Duration Energy Storage Outlook
Energy Storage Systems Cost Survey 2025
Original Story at about.bnef.com