See a $1 trillion “supercycle” of investments in batteries to power the AI grid

Today, technology advancements and dramatic costs have been reduced, setting up battery energy storage as a savior for both renewables and comprehensive electric grids, electricity demand has skyrocketed, and Congress is rapidly introducing wind and solar energy tax credits in stages.

Modern electric grids waste a tremendous amount of electricity generation when demand is not at its peak.The tax credits were largely spared One big beautiful bill from President Trump is here to store that excess electricity here and now, and deploy electricity when necessary when the sun doesn’t shine, the wind plunges in, the natural gas and coal plants are destroyed, improving both the efficiency and stability of the grid. Nearly half of all battery storage projects are combined with solar or wind energy projects as part of a symbiotic relationship.

“Without the battery, it’s a mayhem,” said Izzet Bensusan, founder and CEO of Captona Energy Transition Investment Company. “The utility recognizes that without a battery it cannot manage the grid.

“If you don’t have a battery, your home may not be powered,” Bensan said. luckclaims that the world needs more power. That can come online quickly enough from renewable energy, and batteries are increasingly needed for stability.

After record growth in 2024, the US Battery Energy Storage System (BESS) could grow from 26 gigawatts (GW) capacity (20 million units capacity) to 120 GW to 150 GW by the end of 2030, depending on the scope of the projection. The Department of Energy estimates that nearly 19 Golden Week will appear online in 2025 after 10.4 Golden Week was added last year. California and Texas are easily leading the battery deployment with large grids and ample land, but the rest of the country is beginning to catch up.

Li-ion battery costs have plummeted to 75% in 10 years, with next-generation battery chemistry (sodium ions, lithium sulfur, lithium iron phosphate phosphorus phosphate phosphorus) being more easily supplied in the US, potentially with grids than lithium ion units designed to travel through electric vehicles. And battery manufacturers now see demand for grids overtaking the demand for sluggish EVs in the US

“We’re at the start of a supercycle of investment,” said Cameron Dales, co-founder and president of Peak Energy, which develops battery storage systems from Dale, commonly sourced sodium in the US. “We need to build our capabilities, we need to build our capabilities. We’ve started to see that we’ve grown so much over the last two years, but I think we’re the first to be there.”

Painful and beautiful

The new GOP Expenditure Act covers wind and solar as part of the partisan crusade against renewable energy, but will reduce tax credits from 2027 onwards. Construction should begin by July 2026, or begin phased out in 2033 in 2033, and then start major tax credits for large batteries until 2033.

One catch is that more parts need to be manufactured in the US and is a “foreign entity” from China, but supply chains are evolving towards financial and security needs.

“Energy storage is important whether you’re on the blue side or the red side. Everyone agrees that this is important to the country,” Dale said. luck.

“We don’t outsource the production of F-16s (fighter jets) to other countries, so I think batteries are just as dynamic,” Dale said. “You need to control the building blocks as to how you generate and ultimately store the power.”

Notably, the US Department of Defense has further contracted with domestic battery manufacturing to power military drones.

At the peak is a California manufacturing plant for sodium-ion batteries that utilize abundant US materials without China’s important mineral control. The system requires less cooling to operate at harsher temperatures.

According to the International Energy Agency, after decades when U.S. electricity demand is relatively stagnant, domestic electricity consumption is expected to skyrocket by 25% from 2023 to 2035 and approximately 60% from 2023 to 2050. The majority of that increase comes from hyperscalar: Amazon, Googleand Microsoft is investing in building data centers that range from $75 billion to $100 billion in 2025 alone.

A much more demand and tax credit loss combination is expected to result in a surge in commercial and residential electricity costs. But incentive battery storage can at least help reduce costs.

After all, the supply chain of gas-fired turbines for power plants sells out for the next few years, with new nuclear power generation almost 10 years. Therefore, renewable energy and batteries represent most new generation for the remainder of the decade, regardless of cost.

“I’m going to build solar at any cost. I’m going to charge it. People have to pay it,” Bensan said. “It can appear online in six or nine months. There’s no choice.”

Evolving dynamics

The new dynamic added to the mix is an improved tax credit environment for the battery system compared to wind and solar, which could change project priorities.

More battery systems have recently been collaborated with Solar Farm. Now more developers can build battery systems and instead combine them with auxiliary solar power, said Ravi Manghani, senior director of strategic sourcing at ANZA Renewables, which develops the Solar and Bess software platforms.

“We may be in a paradigm where energy storage is actually driving solar growth,” Mangani said. “Until now, solar has been pushing for energy storage options. It’s possible that the switch has been turned over because of the method of phasing out tax credits.”

Wind power is well combined with battery systems, but the height and low weather patterns of gusts are more difficult to predict than the daily rotation of the sun and the Earth. That’s why most new solar farms are paired with battery storage.

Most rechargeable battery systems are designed to hold 4 or 6 hours of power, but can be built to hold more than 10 hours, but costly. But even if four hours of power is deployed when people return home from work and then return home from energy use spikes in the evening, it is very beneficial for the grid.

“It’s like getting a washing machine without a dryer. These things really strengthen each other,” said Chris Hopper, co-founder and CEO of Aurora Solar, about the natural pairing of solar and battery.

Still, many solar and wind projects are built with or without tax credits, but forecasts show that at least 20% fewer people are more realistic than expected. These losses can still affect battery deployment.

And while costs continue to fall and domestic battery production increases, more progress is needed.

Silicon Valley’s Leiten bets on building Beth using lithium sulfur batteries with US and European materials. This denies the need for the important Chinese-controlled minerals, nickel, manganese, cobalt and graphite.

“To actually reach the next jump called mass market energy storage, which allows them to be deployed very economically anywhere in the world, we need another step change in battery costs.” “The bet on lithium sulfur is that the lowest cost material wins in the long run.”

It is already focusing on battery cell production in California, focusing on the lithium sulfur “GigaFactory,” which is planned for Nevada in July. North Bolt. Lyten also aims to add more Bess manufacturing in the US, Norman said.

“We believe that renewables will continue to move forward, and almost all of that will be combined with batteries. What we see is an insatiable demand for more power,” Norman said.

“In a world where tax credits are becoming more difficult, we need to juice economics as much as possible for renewable energy. That really leads to energy storage and we can turn every electron that an asset generates into value.”