Europe Sets Battery Storage Record Amid Industry Warnings on 2030 Targets
The European battery storage market entered a new phase of growth in 2025, reaching record levels of installed capacity. Specifically, the EU added 27.1 GWh of new storage capacity, representing a 45 percent increase over 2024 and marking the twelfth consecutive year of historic highs. This surge is primarily driven by the rapid deployment of large-scale grid-connected projects. By the end of the year, the total operational battery capacity in Europe amounted to 77.3 GWh, according to the EU Battery Storage Market Review 2025 by SolarPower Europe.
A key shift in 2025 was the dominance of utility-scale batteries as the main contributors to industry growth. These large installations accounted for 55 percent of all new capacity, with 15 GWh installed — more than double the previous year. The report highlights how hybrid projects, where around 15 percent of new grid-connected batteries are paired with solar farms, are beginning to integrate storage systems from the outset of renewable energy projects. This indicates a move towards more integrated and optimised renewable energy systems.
Country-specific analysis shows Germany and Italy leading the market, but Bulgaria experienced an extraordinary leap, climbing to third place with 2.5 GWh due to targeted investment programmes and European funds. Germany installed 6.6 GWh, while Italy contributed 4.9 GWh. The Netherlands and Spain also featured in the top five, with 1.7 GWh and 1.4 GWh respectively. Collectively, these five markets supplied 63 percent of all new capacity in 2025, a decrease from 80 percent in the previous year, signalling a slight decentralisation of the market.
Spain has advanced to operate on a gigawatt scale, with recent legislative improvements aimed at fast-tracking project approvals, particularly in industrial and grid segments. Nonetheless, the report warns about hurdles in merchant business models and administrative bottlenecks, which threaten project timelines due to delays in approvals, supply chain issues, and local opposition in certain regions.
The decentralised segment, especially residential energy storage, saw a decline of 6 percent in 2025, down to 9.8 GWh. This decline reflects reduced electricity prices following the recent crisis and the withdrawal of emergency support schemes. However, falling equipment prices and the adoption of dynamic tariffs in some countries have helped cushion this downturn. Commercial and industrial storage grew by 31 percent to 2.3 GWh but remains significantly below its potential due to fragmented support frameworks and limited commercial cases.
Despite a tenfold increase in capacity since 2021, the industry warns that Europe must replicate this growth to reach approximately 750 GWh over the next five years to stay aligned with the 2030 decarbonisation targets. The report underscores the challenge posed by increasing renewable deployment alongside mounting system flexibility issues. In 2025, negative electricity prices peaked at a record 3.4 percent of the time, or around 310 hours, highlighting the gap between variable generation and grid flexibility.
On the industrial front, Europe's annual cell manufacturing capacity stands at 252 GWh. Yet uncertainties persist due to project cancellations, delays, and a strong focus on electric vehicle supply chains — with 92 percent of existing capacity dedicated to EVs and approximately 70 percent based on nickel chemistry. Stationary storage is emerging as a vital demand vector, underscoring the need for strategic industrial policy.
To accelerate deployment, SolarPower Europe advocates regulatory reforms including dedicated storage permits, single approval procedures, milestone-based grid access, cost-reflective tariffs, and mechanisms for revenue stacking across wholesale, balancing, and capacity markets. Additionally, enhanced cybersecurity standards and harmonised safety and sustainability regulations are deemed vital for safeguarding future growth and fostering integrated energy markets.