The energy storage industry has set ambitious targets for 2025 – and has already exceeded them

Nearly a decade ago, when the energy storage market was in its infancy, an industry organization set a dreamy goal: By the end of 2025, the United States would deploy 35 gigawatts of grid-connected batteries.

So how is the storage industry doing? In the third quarter, 4.7 gigawatts of batteries were installed. In total, more than 40 gigawatts have been deployed, and the year is not over, Canary Media reported. In eight years, energy storage has gone from a small player to one of the largest sources of new energy on the U.S. grid.

Additionally, this represents nearly half of all new renewable energy deployed on the grid between July and September, and this year, renewable energy was the largest source of all new capacity, according to the Federal Energy Regulatory Commission.

Much of the new storage capacity has been deployed in Arizona, California and Texas, states where the grid has been strained in recent years. Experts say the lessons learned from this experience can help other regions deploy battery storage on their networks, including the Midwest and East Coast, which are buckling under the weight of new data center construction.

Startups have taken note.

Redwood Materials, co-founded by Tesla alumnus JB Straubel, added a new business line in June focused on repurposing used electric vehicle batteries for grid-scale storage. The company noticed two overlapping trends: Batteries arriving at its recycling facilities still had plenty of life left, and, meanwhile, the battery storage industry was growing by leaps and bounds.

By 2028, Redwood plans to deploy 20 gigawatt hours of battery storage. Investors voiced their approval, investing an additional $350 million in the company to propel the new business line.

Another startup, Base Power, took a slightly different approach, renting batteries from homeowners and pooling them together to serve as a large virtual power plant. The Austin-based startup raised $1 billion in October to help build a battery factory and fuel its expansion beyond Texas. The company has deployed more than 100 megawatt hours of batteries in Texas.

While lithium-ion batteries dominate new installations, other startups are looking for other technologies that could significantly reduce storage costs.

Sizing Energy is working on a new way to store energy in flexible tanks that float in the open ocean. Fourth Power uses carbon blocks to store heat at very high temperatures and plans to deploy them in 2028 at a lower cost than lithium-ion batteries or natural gas power plants. XL Batteries deploys its flow battery technology at petrochemical storage sites, allowing it to store hundreds of megawatt hours using existing infrastructure. And Cache Energy developed inexpensive calcium hydroxide pellets that could store energy for months with minimal losses.

Overall, this indicates an exponentially expanding industry. Combined with solar and wind, which remain the cheapest forms of new electricity, energy storage has the potential to restructure global energy markets, and with them the U.S. grid.