RMI Report Details Battery Grid Benefits Amid Slowing Growth
A new RMI analysis shows grid-scale batteries cut energy costs and boosted reliability in California and Texas, while also providing local tax revenue.
Grid-scale batteries saved California more than $29 million in peak energy costs in 2024, according to a new analysis from the energy think tank RMI. The systems supplied 13% to 19% of total generation during the grid's tightest hours, performing on par with gas-fired peaker plants.
RMI's report, released earlier this month, also examined the Texas grid. It found that in the following year, energy storage systems supplied 6% to 9% of generation during the Electric Reliability Council of Texas's most critical periods. However, the group noted a December 2025 ERCOT rule change that reduced battery participation in ancillary services added $3.6 million to wholesale prices in a single day.
Grid Reliability and Capacity
The analysis highlights batteries' role in maintaining grid stability during extreme demand. RMI cited a 2022 California heat wave, where 3.4 gigawatts of grid batteries met 6% of the state's energy needs and strengthened reserve margins. This performance contrasted sharply with an event two years earlier. During a less intense heat wave in 2020, when California had less than 1 GW of battery capacity, the state experienced rolling blackouts despite a peak demand roughly 10% lower.
RMI's findings arrive during a period of uncertainty for U.S. energy storage. The report's core forecast predicts 30% annual growth in battery deployment over the next five years. This projection is based on a 2024 outlook from London-based consultancy Wood Mackenzie, made when Inflation Reduction Act incentives were fully active.
A Shifting Growth Forecast
That optimistic growth rate now faces significant headwinds. Earlier this year, Wood Mackenzie revised its five-year forecast for utility-scale battery deployments down to 16%. Its most recent forecast, released today, sees utility-scale deployment flatlining in 2026 and growing just 8% through 2031. Analysts link the slowdown to existing challenges like import tariffs and unfavorable tax treatment for systems with Chinese parts, compounded by an August executive order from President Trump restricting foreign-produced bulk power components.
Financial and Community Benefits
Beyond grid services, RMI's report emphasizes the local economic benefits of utility-scale storage projects. The group reviewed project agreements in several states, finding an average annual gross tax contribution of approximately $6,600 per megawatt, with some projects exceeding $10,000 per MW.
Specific project benefits detailed in the report include:
| Project/Location | Capacity | Key Financial Benefit |
|---|---|---|
| Medway, Massachusetts installation | 250 MW / 500 MWh | About $46 million in revenue over 20 years for the town |
| Purple Sage Energy Center, Nevada | 400 MW | $3.4 million in annual payments to local governments (after partial tax abatements) |
| Libra solar-and-storage, Nevada | Not specified | $170 million in lifetime property and sales taxes |
Health and Safety Considerations
Replacing gas-fired peakers with batteries also yields significant local health benefits, RMI concluded. Using an EPA assessment tool, the group calculated that Suffolk County, New York, could avoid $5.3 million in annual health costs by transitioning its 500-MW Port Jefferson peaker to battery storage. Harris County, Texas, could avoid $3.8 million annually by swapping its 240-MW La Porte plant for batteries.
On safety, RMI addressed high-profile incidents like a January 2025 fire that destroyed most of a 300-MW Vistra array in California. The group stated that serious battery fires are rare and likely to remain so, as the industry standard for stationary storage has shifted to more stable lithium-iron-phosphate chemistry. RMI attributed the Moss Landing facility fire to its use of older, more fire-prone nickel-manganese-cobalt batteries in a design that "would not be permitted under today’s codes and standards."
