When to expect US-made storage systems to get competitive globally

The United States battery storage landscape is complicated. Alongside interconnection challenges and a spotty deployment map, there’s also an ongoing discussion over whether and how China, the current global battery hegemon, may leverage the world’s reliance on its supply chains.

As Clean Energy Associates’ latest quarterly price forecasting report for energy storage outlines, though, competition with China is one feature of the  landscape with the potential to shift in the very near future.

• The top line: There has been an overall, global downward trend in battery prices, but U.S.-made lithium-ion energy storage systems remain around 20% more expensive than those made in China. According to CEA’s report, however, subsidies from the Inflation Reduction Act could prompt that dynamic to reverse as soon as 2026.
• The market grounding: After an uptick in 2021, lithium prices have fallen in recent years. But it’s not just the low, low price of raw materials keeping batteries cheap globally. In China, regional mandates requiring that wind and solar projects be paired with BESS have contributed to quarterly declines in energy storage system prices for the last two years.

Outside of China, battery storage deployments are lower than expected — and lower than needed — to meet global clean energy targets. (The International Energy Agency projects that battery storage capacity will need to increase by 25% per year between now and 2030.) And that’s not just due to tariffs on Chinese-made batteries.

In Europe, for example, where energy storage system developers still benefit from relatively low tariffs on Chinese imports, experts say the region is still lagging on adoption, even though   annual storage deployment doubled in 2023.

According to CEA, U.S. expansion for energy storage capacity is also slower than previously expected — around a year behind schedule, with needed capacity coming online in 2026 instead of 2025.

But the IRA’s 45X tax credits for advanced manufacturing production has the potential to push U.S. batteries to price parity by the time that capacity comes online, CEA’s report said. And, moving forward into 2027 and 2028, U.S. prices could drop below Chinese prices.