United States Residential Energy Storage Market By Technology (Lithium-Ion Batteries, Lead-Acid Batteries, Flow Batteries, Sodium-Based Batteries), By Installation Type (Wall-Mounted, Floor-Mounted, Modular), By End-User (Single-Family Homes, Multi-Family Homes), By Region, Competition, Forecast and Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 1.56 BIllion
CAGR (2026-2031)	24.79%
Fastest Growing Segment	Sodium-Based Batteries
Largest Market	South
Market Size (2031)	USD 5.89 BIllion

Market Overview

The United States Residential Energy Storage Market will grow from USD 1.56 BIllion in 2025 to USD 5.89 BIllion by 2031 at a 24.79% CAGR. The United States Residential Energy Storage Market comprises battery systems installed in private dwellings to store electricity for backup power or load management, typically integrated with solar photovoltaic arrays. The primary drivers fueling this sector's growth include the increasing frequency of grid instability and rising utility electricity rates, which motivate homeowners to prioritize energy autonomy and cost savings. Furthermore, federal investment tax credits and state-level incentive programs continue to improve the financial return on investment for these systems, establishing a durable foundation for adoption that is distinct from temporary technological trends.

However, a significant challenge impeding broader market expansion is the prevalence of high interest rates, which elevate the financing costs for these capital-intensive home upgrades. Despite this economic barrier, the industry has demonstrated remarkable resilience and continued to scale. According to the American Clean Power Association, in 2025, the United States residential storage market exceeded 1,250 megawatts of annual installations in 2024, representing a 57 percent increase compared to the previous year. This data underscores the critical demand for residential energy resilience even amidst challenging financial conditions.

Key Market Drivers

The transition from Net Metering to Time-of-Use rates and self-consumption models is fundamentally altering the economic landscape for home battery adoption. As utilities in major markets reduce compensation for exported solar energy, homeowners are increasingly incentivized to store excess power for onsite usage to maximize savings rather than selling it back to the grid. This regulatory shift has rapidly accelerated the integration of batteries with solar systems, making storage an essential component for financial viability rather than a luxury upgrade. According to Sunrun, November 2024, in the 'Third Quarter 2024 Financial Results', the company's storage attachment rate on new installations reached 60 percent, reflecting a sharp strategic pivot toward storage-centric configurations among leading installers.

Simultaneously, the increasing frequency of extreme weather events and grid reliability concerns serves as a potent catalyst for market growth. Aging utility infrastructure is struggling to cope with severe climate conditions, driving consumer demand for decentralized backup solutions that ensure power continuity during service disruptions. According to Climate Central, April 2024, in the 'Weather-related Power Outages Rising' report, the United States experienced approximately two times more weather-related power outages in the last decade compared to the 2000-2009 period. This heightened volatility is translating into tangible deployment figures, and according to the American Clean Power Association, December 2024, the United States residential storage sector established a new quarterly benchmark with 346 megawatts installed in the third quarter of 2024.

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Key Market Challenges

The prevalence of high interest rates serves as a substantial economic barrier that impedes the broader expansion of the United States Residential Energy Storage Market. Since energy storage systems are capital-intensive upgrades, a significant proportion of homeowners rely on third-party financing to cover the upfront costs. Elevated interest rates directly increase the cost of borrowing, which raises the monthly debt service for these loans and extends the period required for the system to generate a return on investment through utility bill savings. This financial strain discourages price-sensitive consumers and effectively narrows the addressable market to wealthier households or those located in regions with the most aggressive incentive structures, thereby constraining mass-market adoption.

The dampening effect of this high-cost environment is particularly evident in the solar sector, which functions as the primary pipeline for storage deployment. Because residential batteries are predominantly installed alongside solar photovoltaic arrays, any slowdown in solar adoption restricts opportunities for new storage attachments. According to the Solar Energy Industries Association, in 2024, the United States residential solar market contracted by 32 percent compared to the previous year due to these challenging economic conditions. This significant decline in the installation of the parent technology acts as a drag on the energy storage sector, limiting its growth potential despite the critical demand for energy resilience.

Key Market Trends

Widespread enrollment in Virtual Power Plant programs is reshaping the utility of residential batteries by converting them from passive backup units into active grid resources. Utilities are increasingly incentivizing homeowners to dispatch stored energy during peak demand periods, creating decentralized power plants that stabilize the grid without requiring new infrastructure. This aggregation model allows battery owners to monetize their assets through performance payments while enhancing grid resilience. According to Sunrun, February 2025, in the 'Sunrun's Power Plant Programs Complete Successful 2024' announcement, the company’s virtual power plant portfolio supported United States power grids with a combined instantaneous peak of nearly 80 megawatts in 2024.

The expansion of third-party ownership and leasing models is acting as a primary mechanism to sustain deployment volume amidst a high-interest-rate environment. By shifting the financial structure from upfront capital expenditure to a service-based model, installers remove the barrier of initial investment costs for households. This approach aligns with consumer preferences for predictable fees over long-term debt for asset ownership. According to Sunrun, April 2025, in the 'Annual Report 2024', 94 percent of the company’s new customers in 2024 selected the subscription offering, signaling a decisive pivot toward third-party management to circumvent financing challenges.

Segmental Insights

Market analysis identifies the Sodium-Based Batteries segment as the fastest-growing category within the United States Residential Energy Storage Market. This rapid expansion is primarily driven by the abundant availability of sodium, which offers significant cost advantages over lithium-ion technologies and reduces reliance on imported critical minerals. Furthermore, sodium-ion chemistries demonstrate enhanced thermal stability, providing a safer, less flammable option for residential applications. Strategic initiatives by the U.S. Department of Energy to diversify domestic battery supply chains further accelerate this trend, establishing sodium-based systems as a secure and economically viable solution for home energy resilience.

Regional Insights

Based on recent market intelligence, the South United States has emerged as the leading region in the residential energy storage market. This dominance is primarily driven by the region's susceptibility to extreme weather events, such as hurricanes and severe storms, which have made reliable backup power a necessity for homeowners facing grid instability. Key markets like Texas and Florida are leveraging high solar irradiance to pair storage systems with growing residential solar installations. Furthermore, data from the U.S. Energy Information Administration indicates a significant expansion of renewable capacity in the South, creating a strong ecosystem for storage adoption to ensure energy security and efficient load management.

Recent Developments

• In November 2024, Enphase Energy announced the commencement of United States shipments for its IQ Battery 5P units produced at domestic manufacturing facilities. This strategic development allowed the company's projects to align with the Domestic Content Bonus Credit under the Inflation Reduction Act. The shift to localized production was intended to support commercial and residential solar and battery projects by offering potential tax incentive eligibility. Company leadership highlighted that producing the batteries domestically reinforced their commitment to providing reliable clean energy solutions while supporting the local manufacturing sector and meeting the evolving needs of American homeowners.
• In September 2024, SolarEdge Technologies unveiled its next-generation single-phase home solar and storage solution at the RE+ trade show in California. The new residential offering integrated a scalable battery and a newly designed solar inverter capable of delivering up to 11.5 kilowatts of power, providing flexible whole-home backup options for United States homeowners. The system's modular architecture allowed for various configurations, enabling customers to start with a photovoltaic-only setup or a smaller battery capacity and expand as needed. The solution was developed to optimize energy yield through a direct current-coupled design and significantly reduce installation times.
• In July 2024, Generac Power Systems announced that it had been awarded a grant of up to $200 million from the United States Department of Energy as part of the Puerto Rico Energy Resilience Fund. Under this major collaboration, the company planned to facilitate the installation of residential solar and battery storage systems for disadvantaged households across Puerto Rico. The initiative aimed to significantly improve energy resilience for vulnerable residents who frequently experience power outages. This funding was intended to support the deployment of clean energy solutions and assist the region in achieving its long-term renewable energy goals.
• In February 2024, Tesla officially made its Powerwall 3 home battery available to installers across the United States. The new system featured an integrated solar inverter and was capable of delivering 11.5 kilowatts of continuous power, a substantial increase compared to its predecessor. Designed with durability in mind, the unit was engineered to withstand extreme weather conditions and offered simplified installation processes. This product launch underscored the company's strategy to provide a fully integrated solar-plus-storage solution that could back up larger homes and support the growing demand for residential energy independence in the American market.

Key Market Players

• Tesla, Inc
• LG Energy Solution Ltd
• Schneider Electric SE
• Enphase Energy, Inc
• SunPower Corporation
• Sonnen, Inc
• Panasonic Holdings Corporation
• Vivint, Inc
• Bloom Energy Corporation
• Generac Power Systems, Inc

By Technology	By Installation Type	By End-User	By Region
Lithium-Ion Batteries Lead-Acid Batteries Flow Batteries Sodium-Based Batteries	Wall-Mounted Floor-Mounted Modular	Single-Family Homes Multi-Family Homes	Northeast Midwest South West

Report Scope:

In this report, the United States Residential Energy Storage Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• United States Residential Energy Storage Market, By Technology:

• Lithium-Ion Batteries
• Lead-Acid Batteries
• Flow Batteries
• Sodium-Based Batteries

• United States Residential Energy Storage Market, By Installation Type:

• Wall-Mounted
• Floor-Mounted
• Modular

• United States Residential Energy Storage Market, By End-User:

• Single-Family Homes
• Multi-Family Homes

• United States Residential Energy Storage Market, By Region:

• Northeast
• Midwest
• South
• West