What’s next for battery technology in 2026

The energy storage industry walked a bumpy road in 2025, but eyes are turning toward 2026’s tech stack. While lithium-ion remains dominant, pressure is building for longer-duration storage, safer chemistries and more resilient supply chains in the face of AI-driven load growth, data center demand, wildfire risks and tightening domestic content rules.

pv magazine USA spoke with leaders from around the energy storage industry to learn more about what’s next for batteries in 2025.

Longer-duration storage will shift from a niche solution to a strategic necessity.

“As we look to 2026, the industry is moving toward greater technology diversity, more stable revenue models and continued cost declines that will make longer-duration battery energy storage an essential pillar of U.S. energy strategy.” – Giovanni Damato, President, CMBlu Energy, Inc.

“Future market designs must match renewable supply with industrial demand and support longer-duration storage and innovative approaches, unlocking additional revenue streams like energy arbitrage, peak shaving and congestion management.” – Matt Kennedy, Global Head of Client Transformation, IDA Ireland

“When paired with any generation that can come online quickly, long duration storage can deliver the firm reliability consumers need and expect. Fast, affordable, and firm power is on track to win on economics with the assistance of long duration storage, and that momentum isn’t slowing, no matter the political climate.” – Arvin Ganesan, CEO, Fourth Power

“As data center demand continues to surge, there’s growing recognition that we need longer-duration storage solutions and hybrid configurations that can provide the sustained backup power and grid stability these facilities require.” – Jim Spencer, President and CEO, Exus Renewables

Safety concerns could push non-flammable chemistries back into the conversation.

“I think 2027 is more likely than 2026 for wildfire-prone regions like California to begin explicitly valuing non-flammable storage chemistries in procurement or permitting. What would make things move quickly is another Moss Landing fire incident somewhere, and I think it’s a question of when, not if.” – Eugene Beh, CEO, Quino Energy

Non-lithium chemistry deployment will accelerate, though 2026 might not be its banner year.

“While 2026 may not see a dramatic shift in new battery chemistries, they are on the horizon with new manufacturing plants in the design stage.” – Steve Feinberg, President, Bluewater Battery Logistics

“The convergence of EV and storage supply chains is creating real momentum for ‘built-at-home’ solutions and non-lithium chemistries…As the U.S. steadily moves toward a circular storage economy, alternative chemistries are shifting from ‘nice-to-have’ to ‘must-have’ because they improve safety, affordability, and long-term confidence.” – Julie Royes, Vice President of Corporate Affairs, CMBlu Energy, Inc.

“A continued fall in Li-ion battery prices would be the largest bottleneck for non-lithium storage in 2026. However, there are other compelling geopolitical and supply chain reasons why cost might no longer be the biggest consideration in 2026, especially if China/Taiwan/Japan tensions continue to escalate.” – Eugene Beh, CEO, Quino Energy

Recycling and domestic processing will become a supply chain requirement, not just a sustainability move.

“Localized recycling and domestic processing will become non-negotiable if the U.S. wants its battery supply chains to stay domestic. Shipping black mass overseas for processing goes against the logic of domestic manufacturing. In 2026, the winners won’t just be the ones building cells and packs, they’ll be the ones who can close their loop locally, from materials recovery through finished batteries.” – Joe Adiletta, CEO, Volexion

“While it would be great to find a reuse value for end-of-life battery energy projects, the reality of cheaper, smaller, and safer new batteries leaves recycling as the only option for disposal.” – Steve Feinberg, President, Bluewater Battery Logistics

The value of standalone storage will be recognized.

“We’re seeing storage evolve from just being paired with solar for energy arbitrage to becoming a critical infrastructure component that enables data centers to operate on clean energy while maintaining the reliability their operations demand.” – Jim Spencer, President and CEO, Exus Renewables

Foreign Entity of Concern (FEOC) implementation will reshape sourcing strategies more than technology choices.

“The BESS supply chain is working hard to figure out the industry impact of FEOC regulations, and a variety of options will present themselves over the coming year. The good thing is that there is so much recognition that BESS is good for the grid, I have no doubt in the fact that [we] will have options and that compliance will not be a major issue.” – Chris McKissack, CEO, Fullmark Energy

“Developers now face dramatically higher construction costs from the Trump administration’s aggressive tariff policies. Since January 2025, battery storage costs have risen 56% to 69% due to Trump’s tariffs. The administration’s new FEOC regulations, which kick in starting in 2026, threaten to increase costs and complexity further.” – Michael Thomas, CEO, Cleanview

“FEOC regulations and global mineral pressures have created both uncertainty and opportunity, pushing the U.S. to take domestic manufacturing seriously and driving renewed interest in non-lithium, FEOC-safe chemistries that strengthen our energy and geopolitical position.” – Giovanni Damato, President, CMBlu Energy, Inc.

Domestic supply chains will be prerequisites for scale.

“Supply chain localization will evolve from a competitive advantage to a competitive necessity, as customers seek greater certainty around delivery timelines, domestic content compliance, and end-to-end quality control.” – Andrew Gilligan, Senior Director of Commercial Strategy, Fluence

“The companies positioned to win are those that invest now in secure, scalable supply chains and embrace the next generation of chemistries capable of meeting the country’s reliability and AI-era infrastructure needs.” – Giovanni Damato, President, CMBlu Energy, Inc.

Permitting reform plus private capital could be a strong mix.

“In 2026, I expect to see real movement on permitting and transmission reform. Smarter regulation and new grid technologies can finally unlock capacity and move clean power where it’s needed most. Add private capital to the mix, and we can build a stronger, faster grid that keeps up with America’s growing appetite for power.” – Peter Davidson, CEO and Co-Founder, Aligned Climate Capital

AI and data centers will raise the bar for what “bankable” battery performance means.

“In 2026, energy storage will be clearly recognized as one of the fastest and most affordable ways to add flexible power and capacity near high-demand areas, especially as the rapid growth of AI data centers outpaces grid capacity and traps customers in multi-year interconnection queues. In this environment, however, capacity alone is no longer enough. Customers are increasingly demanding truly bankable performance with high-density systems that can reliably execute advanced grid functions.” – Andrew Gilligan, Senior Director of Commercial Strategy, Fluence

“As the AI boom continues, there will be demand for non-lithium, non-flammable energy storage to match these needs. Lithium-ion batteries tend to degrade more rapidly than flow batteries when subjected to frequent cycling, making them less viable for data center use cases, which is why flow batteries are well suited for due to their ability to cycle multiple times a day.” – Eugene Beh, CEO, Quino Energy

“The rise of AI-driven battery management and smarter manufacturing is giving people and communities energy storage resources they can rely on when it matters most. Across regions, we’re seeing [the development of] nano-partnerships, or neighborhood-like collaborations where developers, policymakers and community leaders lift each other up and build the kind of shared strength that comes from truly showing up for one another.” – Julie Royes, Vice President of Corporate Affairs, CMBlu Energy, Inc.

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