Section 01
Market Synopsis
Global Market Revenue Trajectory (USD) // 2025-2035
Global Battery Storage for Data Centers Market Revenue, 2025-2035 (USD Billion)
Base Year 2025 | CAGR 24.6% | Source: Faradex Partners, Company Filings
ⓘ Revenue estimates based on disclosed hyperscaler contract values, deployed capacity and primary panel calibration.
The global battery storage for data centers market size was USD 3.72 Billion in 2025 and is expected to register a revenue CAGR of 24.6% during the forecast period. Market revenue growth is supported by the International Energy Agency's projection, cited in Electrovaya's July 2026 product filing, that data center electricity demand will more than double by 2030, at a time when JLL's 2026 Global Data Center Outlook reports that the average wait time for a utility grid connection in primary data center hubs now exceeds four years. Regulatory drivers including Texas Senate Bill 6, which incentivizes on-site dispatchable power for loads exceeding 50 MVA, and the National Electrical Manufacturers Association's January 2026 publication of Data Center Design Considerations for Energy Storage Systems, are giving operators standardized reference architectures for integrating battery energy storage into new campus power topologies rather than relying on bespoke, one-off engineering for every site. Hyperscaler capital commitments at gigawatt scale, including Energy Vault's August 2026 agreement to supply 1.25 gigawatts of integrated battery storage and grid-forming power infrastructure for a Texas AI data center, are converting battery storage from a backup line item into a primary capital allocation decision. These are some of the key factors driving revenue growth of the market.
Lithium-ion battery cabinets and grid-scale BESS units, nickel-zinc and alternative long-duration chemistry systems, and the power conversion, controls software and EPC integration services that connect them to a data center's electrical topology are the commercial categories that constitute the battery storage for data centers market, with hyperscale operators increasingly specifying storage capacity and duration at the masterplanning stage rather than value-engineering it in later. For instance, in August 2026, Energy Vault, United States, announced a strategic commercial agreement to supply battery energy storage systems, grid-forming power conversion systems and AI infrastructure control software for an initial 1.25 gigawatt deployment backed by a hyperscaler customer contract in Texas, with the company disclosing an expected revenue impact of USD 500 million to USD 600 million across the second half of 2026 and 2027.
However, the reliance on lithium-ion chemistry at gigawatt scale is being challenged by fire safety code compliance requirements and supply chain constraints, prompting a shift toward nickel-zinc and other non-lithium alternatives that mitigate thermal runaway risk while matching the discharge rates AI load ramping requires. Federal tax credit eligibility under the 48E Investment Tax Credit carries foreign entity of concern compliance requirements that add sourcing and documentation complexity to battery procurement, while the Federal Energy Regulatory Commission's still-pending rules on transmission cost allocation for storage assets co-located with data center facilities leave open how much grid-services revenue a given battery deployment can actually earn. Alternative long-duration chemistries such as iron-air and ultra-long-duration systems remain commercially unproven at scale relative to lithium-ion, with the largest disclosed deployments only reaching first construction or reservation agreements during 2026. These factors substantially limit battery storage for data centers market growth over the forecast period.
Section 02
Segment Insights
Lithium-ion (LFP) and Other Revenue Share, 2025
Leading segment drives market value
Application Revenue Share, 2025
End-use distribution 2025
Lithium-ion (LFP) technology segment is expected to account for a significantly large revenue share in the global battery storage for data centers market during the forecast period
Based on chemistry type, the global battery storage for data centers market is segmented into lithium-ion (LFP) technology, lead-acid and VRLA legacy technology, nickel-zinc technology, alternative long-duration chemistry, and other emerging chemistries. The lithium-ion (LFP) technology segment commands the largest revenue share because it is the default chemistry for the utility-scale battery energy storage systems hyperscalers are deploying at gigawatt scale, with Tesla's Megablock configuration, built on its third-generation Megapack, delivering 20 megawatt-hour clusters from a Houston, Texas manufacturing facility with capacity to produce up to 50 gigawatt-hours of Megapack and Megablock units per year. Lithium iron phosphate chemistry's thermal stability, established supply chain and multi-decade manufacturing scale give it a cost and lead-time advantage over newer chemistries for the standard two-to-four-hour duration systems most data center behind-the-meter deployments currently specify.
The alternative long-duration chemistry segment is expected to register a rapid revenue growth rate in the global battery storage for data centers market over the forecast period. Google's February 2026 agreement with Form Energy to build a 300 megawatt, 30 gigawatt-hour iron-air battery capable of delivering its rated power for 100 hours to a new Minnesota data center, and Meta's April 2026 agreement with Noon Energy reserving up to 100 gigawatt-hours of ultra-long-duration energy storage capacity for its data center infrastructure, illustrate how AI workloads' need for continuous, multi-day power availability is pulling capital toward chemistries that lithium-ion's typical duration range cannot economically match.
Revenue CAGR by Segment, 2026-2035 (%)
Growth rates by primary segmentation
ⓘ CAGR from primary panel and disclosed contract capacity data.
Section 03
Regional Insights
Revenue Share by Region, 2025 vs. 2035 Forecast (%)
Regional shift driven by AI data center buildout outside North America
Stationary Storage North America — Largest Revenue Share, 2025
Based on regional analysis, the battery storage for data centers market in North America accounted for the largest revenue share in 2025. The United States is the dominant country, with Google's 1.9 gigawatt clean power agreement in Minnesota, including the 300 megawatt, 30 gigawatt-hour Form Energy iron-air battery announced in February 2026, and Meta's 2.5 gigawatt renewable energy portfolio with NextEra Energy, structured as 13 individual contracts including two dedicated energy storage agreements, representing the largest disclosed hyperscaler storage commitments in the region. Microsoft's grid-interactive EnergyAware uninterruptible power supply agreement with Eaton, confirmed in February 2026, lets the company's data center UPS battery banks respond to utility control signals and participate in grid-stabilizing initiatives across key markets rather than sitting idle between outages. Texas has emerged as a primary deployment hub under Senate Bill 6's on-site dispatchable power incentive, with Energy Vault's 1.25 gigawatt hyperscaler agreement and multiple additional gigawatt-scale projects concentrated in the Electric Reliability Council of Texas service territory. The region's regulatory uncertainty centers on how the Federal Energy Regulatory Commission ultimately allocates transmission costs for battery assets co-located with data center facilities.
Europe
The European battery storage for data centers market is expected to register rapid revenue growth over the forecast period. Tesla's June 2026 agreement with NatPower secured a defined multi-year Megapack rollout tied to grid reliability and renewable integration goals in Italy and the United Kingdom, structured as a 25 gigawatt-hour deployment pipeline that gives Tesla's European energy storage business a committed order book independent of any single data center campus. European Union data center capacity is expanding from a smaller installed base than the United States, and data center operators face additional pressure to pair battery storage with renewable power procurement to meet corporate and regulatory sustainability commitments that are more binding in the European Union than in North America. The region's data center energy storage buildout remains concentrated in markets with the strongest existing renewable generation infrastructure, since battery storage economics for data centers improve substantially when paired with co-located wind or solar rather than deployed as a standalone grid-charged asset.
Asia Pacific
The battery storage for data centers market in Asia Pacific is expected to register rapid revenue growth, though from a smaller base of disclosed hyperscaler-specific storage contracts than North America. China's domestic battery storage sector underwent a structural policy shift during 2025 and 2026, with Ember's July 2026 analysis confirming the end of mandatory storage co-location for renewables in 2025 and the expansion of capacity remuneration to include battery energy storage systems in 2026, moving the country's stationary storage market from an administratively mandated model toward a more market-driven one that data center operators can increasingly participate in directly. Singapore's data center market, valued at USD 3.25 Billion in 2025, continues to expand following the 2022 lifting of its construction moratorium, though land scarcity and power constraints are pushing new campuses toward higher-density designs that increase the battery storage capacity required per megawatt of IT load. Japan and South Korea's data center operators remain more reliant on grid power and diesel backup than on dedicated battery energy storage relative to their North American counterparts, reflecting more stable grid interconnection timelines in both markets.
Latin America
The battery storage for data centers market in Latin America is expected to register moderate revenue growth from a low base, with Brazil and Mexico representing the primary data center markets attracting hyperscaler investment in the region. Grid reliability challenges in several Latin American power markets create a stronger underlying case for behind-the-meter battery storage than in regions with more stable utility interconnection processes, but the region has not yet produced a disclosed hyperscaler battery storage agreement at the gigawatt scale confirmed in the United States, Texas or Minnesota deployments covered elsewhere in this report. Data center operators in the region continue to rely primarily on diesel generator backup and shorter-duration uninterruptible power supply battery banks rather than the grid-services-oriented battery energy storage systems increasingly standard in North American and European hyperscale campuses.
Middle East and Africa
The battery storage for data centers market in the Middle East and Africa is expected to register limited revenue growth from a low base, with the United Arab Emirates and Saudi Arabia representing the region's most active data center investment markets as both countries pursue sovereign AI infrastructure ambitions. Regional data center operators have prioritized securing firm power generation capacity, including gas and nuclear, ahead of battery energy storage system deployment, reflecting an earlier stage of grid interconnection maturity than the queue-driven battery adoption pattern seen in North America. This report does not extend the Strait of Hormuz-related supply chain disruption referenced in other Faradex Partners battery reports to the battery storage for data centers market, since the region's data center battery deployments remain too early-stage for a regional shipping disruption to have a material, currently disclosed impact on project timelines.
Section 04
Indicative Price Trends
Battery Storage for Data Centers Indicative Price Trends, Q3 2025 vs. Q3 2026
Price trajectories by product grade and specification
ⓘ Prices are indicative for commercial supply agreements. Source: Faradex Partners primary panel.
| Product / Grade | Q3 2025 | Q3 2026 | Direction | Key Driver |
|---|
| Utility-scale lithium-ion BESS
(USD per kWh, delivered) | 185 | 162 | ▼ Declining | Megafactory-scale manufacturing capacity additions |
| Nickel-zinc UPS cabinet
(USD per kWh) | 410 | 365 | ▼ Declining | Retrofit kit standardisation and rising order volume |
| Long-duration iron-air storage
(USD per kW, 100-hour system) | 2450 | 2180 | ▼ Declining | First commercial-scale project cost data replacing estimates |
| Grid-interactive UPS controls
(USD per install, software-enabled) | 95000 | 88000 | ▼ Declining | Standardised grid-services integration following NEMA guidance |
| BESS EPC and integration
(USD per kW, turnkey) | 420 | 445 | ▲ Rising | Skilled labour and interconnection engineering bottlenecks |
Section 05
Strategic Developments
August 2026
In August 2026, Energy Vault, United States, executed a strategic commercial agreement to supply battery energy storage systems, grid-forming power conversion systems and AI infrastructure control software for an initial 1.25 gigawatt deployment backed by a hyperscaler customer contract in Texas, disclosing an expected revenue impact of USD 500 million to USD 600 million across the second half of 2026 and 2027.
June 2026
In June 2026, Tesla, United States, secured a multi-year Megapack deployment agreement with NatPower for approximately 25 gigawatt-hours of grid-scale battery storage tied to renewable integration and grid reliability programs in Italy and the United Kingdom.
May 2026
In May 2026, Nextpower, United States, announced a definitive agreement to acquire Prevalon Energy, a battery energy storage systems provider with more than 6 gigawatt-hours of BESS systems deployed globally and 1.3 gigawatts of firm supply contracts supporting AI and hyperscaler data center infrastructure.
April 2026
In April 2026, ZincFive, United States, confirmed it had surpassed 2 gigawatts of nickel-zinc battery power delivered or contracted globally for data center infrastructure, reinforcing nickel-zinc's adoption as an alternative to lead-acid and lithium-ion systems for immediate power applications.
April 2026
In April 2026, Meta, United States, signed an agreement with Noon Energy reserving up to 100 gigawatt-hours of ultra-long-duration energy storage capacity to provide continuous power for its data center infrastructure.
February 2026
In February 2026, Google, United States, announced a 1.9 gigawatt clean power agreement for a new Minnesota data center, including a 300 megawatt, 30 gigawatt-hour Form Energy iron-air battery capable of delivering its rated power for 100 hours, built in partnership with Xcel Energy.
Section 06
Competitive Landscape
Competitive Positioning: Deployed Capacity Scale vs. Data Center-Specific Deployment Breadth
Bubble size represents estimated disclosed hyperscaler contract value
ⓘ Faradex qualitative indices. Source: Faradex Partners Q3 2026.
Tesla Energy
UNITED STATES // Utility-Scale Lithium-ion BESS // 50 GWh/yr Megafactory capacity, 25 GWh NatPower Europe deal
Tesla's energy storage business is the most commercially scaled lithium-ion battery supplier serving hyperscale data center campuses, with its Houston, Texas Megafactory capable of producing up to 50 gigawatt-hours per year of third-generation Megapack and Megablock units following the product line's 2026 relaunch. Its competitive advantage is a Megablock configuration that connects multiple 20 megawatt-hour clusters into ultra-dense arrays purpose-built for behind-the-meter data center deployment, combined with a defined multi-year order pipeline including its June 2026 NatPower agreement covering approximately 25 gigawatt-hours of European grid-scale storage, giving Tesla a disclosed backlog that smaller BESS integrators have not matched.
| Company | Country | Specialisation | Position / Scale | Faradex Assessment |
|---|
| Tesla Energy | United States | Utility-scale lithium-ion BESS | 50 GWh/yr capacity, 25 GWh NatPower deal | HIGH |
| Energy Vault | United States | Integrated BESS and grid-forming controls | 1.25 GW hyperscaler deal, $500-600M revenue impact | HIGH |
| Form Energy | United States | Iron-air long-duration storage | 300 MW / 30 GWh Google Minnesota project | HIGH |
| ZincFive | United States | Nickel-zinc UPS and BESS | 2 GW delivered/contracted globally | MEDIUM-HIGH |
| Nextpower / Prevalon Energy | United States | Utility and hyperscaler BESS integration | 6+ GWh deployed, 1.3 GW firm contracts | MEDIUM-HIGH |
| Eaton | United States | Grid-interactive lithium-ion UPS | Microsoft EnergyAware deployment, key markets | MEDIUM |
| Noon Energy | United States | Ultra-long-duration energy storage | 100 GWh Meta reservation agreement | LOWER |
| NextEra Energy | United States | Renewable PPA and battery storage ESAs | 2.5 GW Meta portfolio, 2 dedicated ESAs | LOWER |
Tesla Energy
Energy Vault
Form Energy
ZincFive
Nextpower
Prevalon Energy
Eaton
Noon Energy
NextEra Energy
Fluence
Wärtsilä
GE Vernova
Section 08
Key Questions Answered
- 01What is the global battery storage for data centers market size in 2025 and what CAGR is expected during 2026-2035?
- 02What International Energy Agency demand projection and JLL grid connection wait-time finding are driving hyperscaler battery storage investment in 2026?
- 03What 1.25 gigawatt agreement did Energy Vault sign in August 2026, and what does its disclosed USD 500-600 million revenue impact imply about per-gigawatt battery storage economics?
- 04What 300 megawatt, 30 gigawatt-hour iron-air battery is Form Energy building for Google, and how does its 100-hour duration compare with standard lithium-ion BESS?
- 05What 100 gigawatt-hour ultra-long-duration agreement did Meta sign with Noon Energy in April 2026, and how does it differ from a constructed project like Google's Form Energy battery?
- 06What nickel-zinc milestone did ZincFive reach in April 2026, and why is this chemistry gaining share in data center UPS applications?
- 07What grid-interactive UPS agreement did Microsoft sign with Eaton, and what capability does EnergyAware technology add to standard backup batteries?
- 08Why did Nextpower acquire Prevalon Energy in May 2026, and what does the deal's disclosed capacity and contract scale suggest about market consolidation?
- 09How does Texas Senate Bill 6 and the National Electrical Manufacturers Association's 2026 data center energy storage standard shape battery storage procurement decisions?
- 10Why does the distinction between a capacity reservation agreement and a confirmed construction timeline matter when evaluating alternative long-duration storage providers for data centers?
Section 09
Table of Contents
Section 10
Scope of Research
This report covers the global battery storage for data centers market across all major segments and geographic regions. Primary research combines panel conversations with industry experts and is cross-referenced against company annual reports, U.S. Securities and Exchange Commission filings, and government agency data. All market size figures use 2025 as the base year with a 2026-2035 forecast period.
