The trajectory and scale of U.S. battery deployment demanded by the AI boom is becoming clearer. As data center campuses get bigger and interconnection queues stretch project timelines, batteries are becoming an essential speed-to-power tool. This new demand from AI is simultaneously dominating behind-the-meter deployments, driving massive utility-scale projects, and boosting a lagging residential market.
According to new research from the Solar Energy Industry Association and Benchmark Mineral Intelligence, around 10.3 gigawatts (31 gigawatt-hours) of battery storage systems came online in the first half of 2026, including utility-scale and behind the meter. That’s a more than 23% jump in capacity over the first half of 2025, one largely driven by a handful of grid-tied megaprojects: Just seven projects accounted for more than half of utility-scale deployments.
Things are expected to slow down, however, at least in the near-term. Project delays are expected to dramatically reduce the total capacity that comes online this year — 61 GWh versus the 90 GWh that was expected in January.
Nevertheless, analysts revised their longer-term projections for utility-scale storage upward by 9%, to 115 GW by 2030. That’s thanks in part to regulatory interventions, including the Federal Energy Regulatory Commission’s order directing regional grid operators to review and potentially reform their large load interconnection tariffs.
But it’s also thanks to several long-term offtake agreements between hyperscalers and utilities or independent power producers. For example, Google in February agreed to buy a 30-GWh system from iron-air battery maker Form Energy.
Meanwhile, behind-the-meter storage is rapidly expanding its share of the total installed volume, thanks in part to the speed-to-power strategies being deployed by companies like Amazon, Meta, and xAI. Those companies are largely opting to build on-site “energy islands,” the report explains, pairing batteries with fossil gas turbines, gensets, and — at least in theory — nuclear. In those configurations, batteries are absorbing load surges, and smoothing generator ramping to help onsite turbines operate more efficiently.
Behind-the-meter on the rise
Data centers have been driving the vast majority of behind-the-meter demand since 2025, and will continue to do so into the next decade. In the first half of 2026 data centers accounted for around 75% of behind-the-meter installations, but SEIA expects the sector to account for around 90% in 2030. That’s a significant jump from 2% of installations in 2022, and 21% in 2024.
Overall behind-the-meter storage is expected to grow from 14% of battery deployments in 2026 to 24% in 2030, the report found. And annual data center demand for behind-the-meter storage will scale from around 5 GWh this year to 24.4 GWh by 2030.
The duration of those installations is also on the upswing. It is expected to really jump starting next year, and reach an average of 3.25 hours by 2030, up from 2.05 hours this year. The expanding time window is indicative of a change in how data centers are using their batteries. While early C&I deployments have focused largely on peak shaving, demand charge reduction, and power quality management, longer durations allow data center sites to conduct multi-hour energy shifting to leverage renewables and bridge power during grid constraints.
A boost for residential
Residential storage still faces headwinds, including the early expiration of the 25D tax credit, which ended last year, pulling demand forward in 2025.
Residential storage deployments are projected to drop 16% across the full year. But that’s a far better outlook than the 49% year-over-year drop SEIA was predicting in its second quarter forecast.
The data center boom, meanwhile, is providing a secondary catalyst for residential growth, as hyperscalers looking to bypass traditional generation queues and participate in “bring your own capacity” programs turn to asset aggregators.
Google, for example, recently agreed to buy 100 megawatts of capacity in PJM from Voltus, which pioneered the framework a year ago. Voltus itself has historically focused on commercial and industrial aggregations, but has also moved to expand its residential portfolio, via partnerships with Octopus Energy and more recently with Sunrun, bringing residential batteries into the fold.
The residential storage market, while still in early stages, has started to shift toward a third-party ownership model that may allow battery providers to claim still-standing 48E commercial credits. Newcomer Base Power, for instance, provides home battery installations in exchange for controlling the assets. This is also the approach long taken by Sunrun, which has also moved to offer BYOC for data centers, in partnership with Tesla and Renew Home.
However, utilities are also experimenting with other forms of financing. Last week, New Jersey utility Public Service Electric & Gas Company unveiled a new program, dubbed GridSmart, where it will help with financing new batteries, but customers will ultimately own their systems. In exchange, those batteries will be integrated into PSE&G’s residential VPP portfolio and leveraged to reduce grid demand during peak periods.
