The U.S. is rapidly onshoring stationary battery energy storage system (BESS) production, driven by tariffs, federal incentives, and the booming demand for grid-scale storage.
As the U.S. transitions to a cleaner, more resilient energy grid, the spotlight is on stationary battery energy storage systems (BESS) and where they’re made. Historically, much of the BESS supply chain has been concentrated in Asia, leaving American developers vulnerable to geopolitical tensions, shipping delays, and rising costs. But that landscape is changing fast.
Onshoring Momentum Builds
Leading energy storage companies have taken early steps to localize production in the U.S., citing pandemic-era disruptions and the high cost of overseas transportation as key motivators [1]. Their efforts are part of a broader industry trend: the number of U.S.-based battery module suppliers is expected to more than double, from four in early 2025 to nine by 2027 [2].
Federal Incentives Fuel Growth
The Inflation Reduction Act and other federal initiatives created strong incentives for domestic manufacturing. These policies reward developers for using U.S.-made components, helping offset the initial costs of building local supply chains. As a result, manufacturers are racing to establish domestic facilities to meet demand and qualify for tax credits.
Meeting the Renewable Challenge
As utilities and independent power producers integrate more solar and wind into the grid, BESS becomes essential for balancing intermittency and ensuring reliability. Domestic production not only shortens lead times, but also aligns with broader decarbonization goals [3].
In short, the onshoring of stationary BESS manufacturing is more than a supply chain shift. It’s a strategic move toward energy independence, economic resilience, and climate leadership.
Obstacles
Although domestic battery production is growing rapidly, demand is far outpacing production capacity. New policies have increased building costs for production facilities and tariffs drastically increase domestic manufacturing costs. Although domestic content may qualify for additional incentives, a BESS project may still have better ROI with foreign battery components including cells.