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Energy Storage Update 2026: Data Centers, Revenue Opportunities, OBBBA and Tariffs


2 minute read | May.04.2026

AI-driven data center demand and emerging revenue opportunities in the United States are offsetting political and regulatory uncertainty to sustain continued growth in U.S. energy storage deployments, while evolving regulatory and incentive frameworks across Europe, the UK, Japan and broader Asia are increasingly supporting and accelerating global energy storage adoption.

Despite political headwinds, tariff increases and supply chain constraints, the growth in storage deployments continues in stride. In 2025, 58 GWh of new battery storage capacity was installed in the U.S. The U.S. is expected to install approximately 15 GW of new battery energy storage capacity in 2026 and over 90 GW over the next five years.

Globally, for the first time ever, over 100 GW of energy storage capacity was added in a single year, representing over 40 percent annual growth.

At Orrick, we have been supporting a range of energy storage industry participants in navigating the spectrum of commercial and regulatory arrangements in light of these complex dynamics and growth. As the next report in our series of biennial Orrick Energy Storage Updates, this year’s report highlights five key takeaways shaping the energy storage landscape:

  1. In the U.S., new revenue markets and data center transactions have emerged, while offtake agreements now often include seller protections for trade, tax and other regulatory risks.
  2. The One Big Beautiful Bill Act (OBBBA) and U.S. state legislation have introduced new dynamics impacting BESS supply chain, procurement and build-transfer arrangements, while broad tariff, duty, UFLPA and CFIUS regimes continue to impact the storage supply chain.
  3. Tax credit, supply chain, fire risk and new revenue structures continue to play central roles in the BESS financing and M&A markets.
  4. New permitting, zoning and siting requirements, and increased federal oversight are complicating BESS development and real estate strategies.
  5. Global regulatory momentum is accelerating: from expanding EU frameworks and UK market reforms to Germany and France’s incentives, Japan’s new regulatory and tariff structures, and ambitious storage targets across South and Southeast Asia.