2025 was the 12th consecutive year that the EU has installed record levels of new battery storage capacity, according to the SolarPower Europe report.

The report describes 2025 as a pivotal year for the sector, with battery installations growing by 45% year-on-year since 2021, marking a return to faster expansion after a slowdown in 2024. Utility-scale battery energy storage systems (BESS) accounted for 55% of new capacity additions, highlighting a structural shift in the market towards large, grid-connected projects. Drivers of the growth in large-scale projects were named as improved policy frameworks, evolving market conditions and increasing investor confidence.

Batteries are becoming a key enabler to Europe’s energy transition as renewable energy penetration rises to help stabilise grids, reduce curtailment, support security of supply and lower overall system costs, according to SolarPower Europe. It says solar power has been the main actor, pushing renewables close to half of EU electricity generation in 2025.

Fig 1: EU annual battery energy storage (BESS) installed capacity, 2016–2025: battery storage deployment in the EU regained much stronger traction in 2025

Source: SolarPower Europe (2026), EU Battery Storage Market Review 2025

Behind-the-meter storage continues to play an important role in residential and distributed energy systems, with batteries increasingly installed alongside new rooftop solar systems in leading markets, the data shows. However, residential battery installations declined for the second consecutive year, falling by 6% to 9.8 GWh. This drop is attributed primarily to lower electricity prices and the scaling back of support schemes. Commercial and industrial (C&I) storage grew modestly but remains ‘far below its potential’, highlighting untapped opportunities for flexibility in businesses and industrial users, says the report.

According to SolarPower Europe, the surge in utility-scale deployment sends a strong signal to policymakers and investors. ‘Europe’s battery storage market is growing fast and delivering the flexible capacity our energy system urgently needs,’ said Walburga Hemetsberger, CEO. ‘The strong uptake of utility-scale batteries in 2025 shows investors are ready, the technology is mature and the system benefits are clear. But we must now dramatically accelerate deployment. To support EU security and competitiveness, we need a battery fleet capable of supporting a fully flexible, renewable-based energy system.’

Beyond deployment, the report assesses the state of Europe’s battery manufacturing industry. Across battery materials, cells and pack assembly, Europe’s industrial base had 252 GWh of nominal battery cell production capacity in 2025. However, the analysis highlights significant gaps in the supply chain. While Europe has strong capabilities in electrolyte and separator production, cathode and anode active material manufacturing remains limited. More than 90% of existing cell production capacity is currently dedicated to electric vehicles, meaning Europe is still ‘far from having a fully integrated, domestic supply chain for stationary battery energy storage systems’, according to the report

The analysis also flags persistent challenges for Europe’s battery sector, including project postponements and relatively high production costs, which continue to affect competitiveness. These constraints, SolarPower Europe argues, underline the need for a more resilient and fully integrated European battery value chain that can support both mobility and stationary storage markets.

Call for action

To accelerate progress, the report outlines three priority areas for EU policymakers and industry stakeholders.  

First, it calls for faster deployment of battery storage by simplifying and speeding up permitting processes for storage and hybrid projects, prioritising grid-friendly projects in connection queues, and addressing tariff barriers to ensure fair market access.  

Second, it urges the development of affordable and resilient supply chains through targeted investment in manufacturing and innovation, improved access to critical raw materials, expanded recycling capacity, and strategic global partnerships to diversify supply.  

Third, the report highlights the need to strengthen quality, safety and sustainability frameworks, including harmonised safety standards, improved recycling and second-life regulations, and robust carbon footprint disclosure requirements across the battery value chain.

Antonio Arruebo, market analyst and lead author of the report, said the latest data shows the EU storage market is regaining momentum, particularly in large-scale systems. ‘At the same time, the decline in distributed batteries reminds us that we still need clearer policy support to unlock more investments for businesses and households,’ he said. ‘EU battery manufacturing has made significant progress over the past years, but uncertainty remains. Batteries remain renewables’ best allies, essential to integrate clean power, stabilise the system and deliver Europe’s energy transition. Looking ahead, accelerating deployment across all segments will be key to meeting Europe’s goals.’