Grid-Scale Battery Market

The global grid-scale battery market size was USD 54.80 Billion in 2025 and is expected to register a revenue CAGR of 23.0% during the forecast period. Market revenue growth is supported by the US Section 48E technology-neutral investment tax credit, which extends standalone energy storage eligibility through at least 2033 and layers a domestic content bonus adder that rises to a 50% adjusted percentage threshold for projects beginning construction in 2026, incentivising utility-scale battery energy storage system deployment across renewable integration, ancillary services and data center backup applications. Sungrow Power Supply disclosed 2025 global energy storage system shipments of 43 GWh, up 53.5% year on year, with energy storage revenue of RMB 37.29 billion overtaking solar inverters as the company's largest business line for the first time, while CATL reported energy storage battery shipments of 121 GWh in 2025, a 29% increase, retaining the largest global energy storage battery shipment share for a fifth consecutive year. Hyperscale data center operators have emerged as a fast-growing demand source, with Fluence Energy reporting a record $6.4 billion contracted order backlog and a 45.6 GW / 163.7 GWh order pipeline as of its fiscal third quarter of 2026, including its first large behind-the-meter data center order. These are some of the key factors driving revenue growth of the market.

Utility-scale battery energy storage system integrators, containerized lithium iron phosphate system manufacturers, grid-forming inverter and power conversion system suppliers, and third-party engineering, procurement and construction contractors are the commercial categories that constitute the grid-scale battery market, with front-of-meter developers requiring bankable multi-hour storage platforms to firm intermittent renewable generation and to qualify for federal and state incentive programs. For instance, in July 2026, BYD Energy Storage, China, signed an 11.275 GWh battery supply contract with Masdar for the Round the Clock project in Abu Dhabi, a 1,644 MW / 11,275 MWh single battery energy storage station paired with a 5.2 GW solar array that the companies describe as the world's largest combined solar-plus-storage plant, following BYD's earlier 12.5 GWh grid-scale contract with the Saudi Electricity Company. Vertically integrated Chinese cell-to-system manufacturers are increasingly winning the largest disclosed single-site project awards outside their home market.

However, the One Big Beautiful Bill Act signed in July 2025 introduced graduated domestic content adjusted percentage thresholds for the Section 48E investment tax credit domestic content bonus, rising to 50% for projects beginning construction in 2026, alongside prohibited foreign entity restrictions on battery material sourcing that take effect on a phased basis from 2026, creating supply chain qualification uncertainty for developers who have historically sourced lithium iron phosphate cells from Chinese manufacturers at the lowest disclosed prices in the market. Domestic non-Chinese cell manufacturing capacity remains insufficient to meet the volume of announced US utility-scale storage projects, and interconnection queue backlogs at regional transmission organizations continue to delay project energisation independently of equipment availability. These factors substantially limit grid-scale battery market growth over the forecast period.

Based on technology, the global grid-scale battery market is segmented into lithium iron phosphate, nickel manganese cobalt, sodium-ion, and flow and other emerging chemistries. The lithium iron phosphate segment commands the largest revenue share because grid-scale integrators including BYD Energy Storage, CATL and Sungrow Power Supply have standardised utility-scale product lines almost entirely on lithium iron phosphate cells, which eliminate cobalt exposure, support 6,000 or more charge cycles, and have reached the lowest disclosed cell and pack prices of any commercially deployed grid-scale chemistry, making lithium iron phosphate the default specification in nearly all new utility-scale tender awards evaluated for this report.

The data center backup and co-location segment is expected to register a rapid revenue growth rate in the global grid-scale battery market over the forecast period. Fluence Energy disclosed that its data center pipeline grew more than 30% quarter on quarter to approximately 12 GWh in its fiscal second quarter of 2026 before securing its first large behind-the-meter data center order and additional hyperscaler master supply agreements by its fiscal third quarter, and Tesla's master supply agreements with Sunrun and Renew Home to offer 16.8 GW of flexible power output to hyperscalers and grid operators through a virtual power plant illustrate how AI data center electricity demand is converting into direct grid-scale storage procurement.

• 01What is the global grid-scale battery market size in 2025 and what CAGR is expected during 2026-2035?
• 02What Section 48E investment tax credit domestic content bonus threshold applies to standalone storage projects beginning construction in 2026?
• 03What global energy storage system shipment volume and revenue did Sungrow Power Supply disclose for 2025, and how did this compare with its solar inverter business?
• 04What energy storage battery shipment volume and global market share did CATL report for 2025, and what gross margin did the segment achieve?
• 05What order backlog and order pipeline did Fluence Energy disclose for its fiscal third quarter of 2026, and how much of that pipeline is attributed to data center customers?
• 06What battery supply contract did BYD Energy Storage sign with Masdar for the Round the Clock project in Abu Dhabi, and how does it compare with BYD's Saudi Electricity Company contract?
• 07How do the domestic content and prohibited foreign entity provisions of the One Big Beautiful Bill Act affect grid-scale battery project eligibility for the Section 48E investment tax credit from 2026?
• 08Why does lithium iron phosphate account for the largest technology segment share in the global grid-scale battery market?
• 09What grid-forming PowerTitan platform did Sungrow Power Supply launch in Europe in January 2026, and what ancillary service capabilities does it add?
• 10Why does the data center backup and co-location application segment register the fastest revenue growth rate in the global grid-scale battery market over the forecast period?

This report covers the global grid-scale battery market across all major segments and geographic regions. Primary research combines panel conversations with industry experts and is cross-referenced against company annual reports and government agency data. All market size figures use 2025 as the base year with a 2026-2035 forecast period.