EU & US Energy Storage Policy 2026: Compliance Is Reshaping the Industry
The global energy storage market is undergoing a fundamental transformation. In 2025, worldwide storage installations reached approximately 92 GW / 247 GWh, a 23% year-over-year increase, with projections for 2026 expected to surpass 123 GW / 360 GWh. As markets mature, regulatory compliance has emerged as the single most critical factor distinguishing successful projects from stranded investments.
1. US Market: Record Growth Amid Policy Uncertainty
The United States posted historic numbers in 2025, deploying 18.9 GW / 51 GWh of storage systems across grid-scale, residential, and C&I segments. Wood Mackenzie projects an additional 500 GWh of storage capacity will be added over the next five years.
However, 2026 brings significant policy shifts. The FEOC (Foreign Entity of Concern) restrictions under the One Big Beautiful Bill Act (OBBBA) took effect on January 1, 2026, disqualifying projects that receive substantial assistance from entities in FEOC-designated countries from ITC eligibility. Meanwhile, H.R. 1 imposes minimum non-PFE material assistance cost ratios—starting at 55% in 2026 and escalating to 75% by 2030—to claim tax breaks.
2. EU Market: Strategic Autonomy Meets Energy Security
The EU is simultaneously expanding its storage market while imposing stringent new requirements. 2026 marks the full implementation phase of the EU Batteries Regulation, requiring carbon footprint declarations and battery passport data preparation for industrial batteries >2 kWh.
The newly proposed Industrial Accelerator Act (March 2026) introduces Made-in-Europe requirements: BESS systems larger than 1 MWh must include an EU-made battery management system within one year of enactment, with EU-manufactured battery cells and an additional main component mandatory after three years. Foreign direct investments exceeding €100 million in battery storage technologies will face additional regulatory scrutiny.
| Market | Key 2026 Policy | Implication |
|---|---|---|
| United States | FEOC restrictions effective | Supply chain must avoid FEOC-designated sources |
| United States | Non-PFE cost ratio: 55% | BESS cost composition under scrutiny |
| European Union | EU Batteries Reg. implementation | Carbon footprint declarations required |
| European Union | IAA local content rules | EU-made BMS for >1MWh systems |
Both markets signal a clear direction: compliance is no longer optional—it is a competitive advantage. Developers who proactively adapt their supply chains, certification processes, and product designs to meet evolving standards will lead the next wave of market growth.
At moPower, we understand the complexity of navigating dual-market compliance. Our team offers tailored support for US ITC eligibility and EU Batteries Regulation alignment, ensuring your projects meet regulatory requirements without compromising timeline or budget. Visit moPower360.com to learn how we can help you turn regulatory challenges into market opportunities.