Why the US storage market felt like a roller coaster
For US battery storage, 2025 was a turbulent year. The Trump administration moved to roll back and cancel key clean energy investment incentives and funding from the Inflation Reduction Act (IRA), injecting uncertainty into project pipelines and financing.
Standalone energy storage kept access to the base 30% Investment Tax Credit (ITC) through 2032, preserving a crucial pillar of support. But new domestic content and foreign-entity-of-concern (FEOC) rules increased complexity around which projects and supply chains still qualify, forcing developers to revisit sourcing and contracting strategies.
At the same time, market revenues weakened:
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In Texas, storage revenues reportedly fell nearly 90% compared to 2023, as price spreads compressed.
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In California, net annual revenues per kW of battery capacity dropped from about $103/kW in 2022 to $78/kW in 2023, and roughly $53/kW in 2024, as peak power prices softened.
On the cost side, battery and project costs did not fall fast enough to compensate. Some analyses estimate that projects once modeled at around $192/kW in revenue with $100/kWh battery costs in 2023 are now facing roughly $55/kW in revenue and $130/kWh battery costs, helping drive the cancellation of roughly 79 GW of planned US battery capacity in 2025.
Looking to 2026, market views are split: some expect more cancellations as economics tighten, while others predict a late-year push for systems that can navigate stricter policy and higher performance expectations.
BasenPower commentary: how to approach US projects under tighter economics
From BasenPower’s viewpoint, the US market remains strategically important but now requires much sharper project selection and structuring:
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ITC is not enough – stack value streams carefully
With energy arbitrage and ancillary revenues under pressure, projects need more than a headline ITC. Developers should model capacity payments, bilateral contracts, and grid support services in detail, stress-testing scenarios with lower spreads and delayed policy clarity. -
Supply-chain strategy is now a policy question
Domestic content and FEOC rules mean that where and by whom components are made directly influences project bankability. We see growing interest in hybrid models that combine cost-effective global manufacturing with local assembly or integration to meet policy requirements. -
Bankable design and proven operation will filter winners and losers
With tens of gigawatts of capacity cancelled or at risk, lenders and offtakers are focusing on:-
proven hardware combinations,
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realistic degradation and availability assumptions, and
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partners who can support systems throughout the full ITC period.
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For BasenPower and our partners, the US in 2025–2026 is less about chasing volume and more about carefully structured, high-quality projects that can survive policy swings and revenue volatility.