BloombergNEF (BNEF) projects global energy storage deployments will reach 158 GW / 459 GWh in 2026, a sharp acceleration from the record set just one year prior, according to the firm's latest Energy Storage Market Outlook. The forecast arrives as falling hardware costs, rising renewable penetration, and mounting grid reliability pressures converge to redefine the commercial logic of battery storage worldwide.
Background
The 2026 projection follows a breakout year for the sector. Global storage additions, excluding pumped hydropower, reached 112 GW in 2025 - up 48% from 2024, marking the first time annual installations surpassed the 100 GW threshold, according to BNEF. The storage industry took only four years to scale from 10 GW to more than 100 GW in annual additions - a ramp rate significantly faster than either solar or wind achieved at comparable stages.
Equipment cost declines have been a central driver. The global average price of a turnkey battery energy storage system (BESS) fell to $117/kWh in 2025 - a 31% decline from the prior year, according to BNEF's Energy Storage Systems Cost Survey 2025. Battery pack prices for stationary storage specifically dropped to $70/kWh globally in 2025, a 45% decrease from 2024, making it the cheapest lithium-ion segment for the first time, according to BNEF. The benchmark levelized cost of storage for a four-hour battery project fell 27% year-on-year to $78/MWh in 2025 - the lowest since BNEF began tracking in 2009.
Details
The 2026 growth trajectory is not uniform across regions. India is expected to install 1.8 GW / 5.4 GWh of storage in 2026, up from just 0.5 GW / 0.9 GWh in 2025, as projects awarded through government-led auctions begin commissioning, according to BNEF. Sub-Saharan Africa saw annual installations quadruple year-over-year in 2025, adding 4.3 GW / 8.8 GWh. In the Middle East, Saudi Arabia led regional additions in 2025 with 2.1 GW / 7.8 GWh, representing approximately 87% of the region's total new capacity, BNEF reported.
In the United States, the Energy Information Administration's February 2026 Electric Power Monthly report projected 26.3 GW of battery storage additions for 2026 - the largest single-year expansion in more than two decades. However, supply chain constraints linked to Chinese battery components pose a near-term headwind. New restrictions on battery components tied to China took effect at the start of 2026, prompting developers to advance construction timelines, according to BNEF. U.S. turnkey BESS costs remain significantly higher than the global average, at $219/kWh versus $73/kWh in China, per BNEF's cost survey.
Technology diversification is also accelerating. Long-duration energy storage additions - defined as six hours or longer - are forecast to quadruple to approximately 2 GW in 2026, with most new capacity coming from non-lithium-ion technologies concentrated in China, according to BNEF. The firm also expects sodium-ion batteries to begin capturing share in the stationary storage market as manufacturing scale builds. On the application side, BNEF has tracked 12.9 GW / 51.5 GWh of announced, operational, or under-construction on-site storage at data center complexes, reflecting surging demand driven by AI infrastructure build-out.
Revenue stacking - the combination of energy arbitrage, ancillary services, and capacity payments - is reshaping project finance. According to BNEF, the share of storage deployed solely for ancillary services shrank from 10% of the market in 2021 to just 2% in 2025, as energy shifting and co-location with renewables now dominate the application mix. Ember research published in December 2025 noted that modern LFP assets carry 20-year operational lifetimes and 90% round-trip efficiency. Combined with lower cost of capital under auction-backed revenue structures, these factors have driven the effective levelized cost of storage well below the threshold at which dispatchable solar becomes economically viable.
Outlook
BNEF forecasts cumulative global storage capacity will reach 2 TW / 7.3 TWh by 2035 - roughly 12 times the cumulative build recorded in 2024. Emerging markets including India, Southeast Asia, Italy, and Latin America are expected to scale significantly in the latter half of the decade. Annual additions are projected to grow at approximately 23% compound annual rate through 2035, according to BNEF, with utility-scale projects continuing to dominate capacity but long-duration assets capturing a growing share as policy mandates and grid needs evolve.
