Energy storage deals market

Introduction

Deal value in the sector rose 30% to USD30 billion in 2025, even as volumes fell across the energy transition market as a whole. Meanwhile, global installations of battery energy storage systems (BESS) reached 315 gigawatt-hours (GWh) in 2025. And they’re forecast to total 450 GWh this year. These trends indicate an expanding asset base, which typically feeds M&A pipelines.

This report examines the forces behind the momentum. It expands on DLA Piper’s Energy Transition M&A Report 2026, with data taken from two sources: 

• a survey of 49 DLA Piper energy and infrastructure lawyers – carried out in late 2025 across 20 countries
• market intelligence from GlobalData covering almost 9,600 transactions in the energy transition space and completed in 2024 and 2025

Together, these sources paint a picture of a market where energy storage is evolving from a supporting technology to a core investment asset. 

Energy storage deal volume is growing fast 

By volume, the proportion of energy transition M&A made up by energy storage deals rose from 4% in 2024 to 6% in 2025 (see figure 1). Yet total volume of the energy transition M&A market declined by 15%. 

In terms of value, the storage sector’s share remained stable at 5% across 2024 and 2025. 

These figures suggest that the segment’s growing presence is being driven primarily by higher activity levels, not larger deal sizes.

In 2025, energy storage M&A was almost entirely dominated by BESS, which made up 252 of the 264 deals globally (95% – see figure 2). BESS represented USD26.5 billion of deal value in 2025, far outweighing all other technologies combined.

The data suggests investors are focused on technologies that are commercially proven and rapidly scalable, especially to support solar and wind integration on the grid.

The data reflects what our energy and infrastructure lawyers are seeing in the market. According to our survey respondents, energy storage transactions were the number one driver of energy transition deal activity in 2025 (cited by 90%). A clear majority (59%) report a marked rise in energy storage-related M&A (see figure 3).

The fundamentals driving demand for energy storage are strengthening. The market expanded rapidly in 2025, with new capacity additions reaching 106 GW – a 43% year-on-year increase.

There are several underlying drivers of this demand – including: 

• the rapid build-out of intermittent renewable generation
• increasing grid congestion and volatility
• rising curtailment levels
• the need for capacity firming and ancillary services

In response, investors appear to be prioritizing commercially proven solutions that support renewable integration and offer near-term value and predictable returns. 

Non‑BESS technologies accounted for a smaller share of overall deal activity. But their aggregate deal value (USD3,239 million – see figure 4) largely went into larger-scale assets like pumped hydro, reflecting their capital intensity and strategic importance. While less active in volume terms, these technologies – particularly long-duration storage solutions – remain key to system flexibility and decarbonization.

Co-location: where storage meets renewables

Co-location is also a significant draw. It was by far the most common response when we asked our lawyers which types of energy storage deals they’re seeing most frequently. “Co-location with renewables” (cited by 76%) topped their list – far ahead of standalone facilities in second place (57% – see figure 5.) 

Co-location can offer several advantages to investors considering energy storage acquisitions. It may improve grid integration and project economics and support bankability by enabling revenue stacking. It may also reduce curtailment risk, price cannibalization, and price volatility.

That said, demand for standalone utility-scale storage remains robust as grids increasingly require flexibility.

Standalone BESS assets appeal to buyers because they can be strategically located and respond quickly when the grid needs balancing. They may also support ancillary services and enable automated electricity trading on the open market, which can contribute to commercial viability without being tied to generation.

Revenue stacking and co-location lead the way

Energy storage has a compelling commercial story: investors are attracted to its multifaceted value proposition.

When asked what’s behind the interest in it, our survey respondents point first and foremost to revenue-stacking opportunities (cited by 63% – see figure 6). Energy storage is commonly seen by respondents as an asset with a range of revenue streams: trading electricity, balancing the grid, and providing capacity.

Not far behind is co-location with renewables (61%). The ability of storage solutions to manage intermittency and enhance project economics holds a strong appeal for investors. 

Grid flexibility and decarbonization mandates (51%) are also key contributors to investor appetite. Together, they amount to a single structural driver: the greater grid flexibility demanded by the transition to a low‑carbon power system. Their high ranking reflects the central role storage plays in enabling this shift, with assets providing essential balancing capacity and supporting compliance with tightening emissions frameworks.

Further behind are scalability and innovation potential (35%); policy support and subsidies (27%); and the falling cost of storage technology (22%). 

Overall, our findings suggest the potential operational and commercial advantages of storage are significant draws in today’s market. 

Separating the credible from the speculative 

We wanted to explore what investors look for in energy storage pipelines and how they assess quality when evaluating potential acquisitions.

When asked what distinguishes buildable from speculative portfolios, 67% of survey respondents cited secured grid connection as the strongest marker (see figure 7). 

With grid access noted as the primary bottleneck for scaling energy storage pipelines, respondents find secured connections can make assets more investable. It materially de‑risks them, provides a clearer path to revenue, and reduces exposure to permitting delays and grid queue uncertainty. 

While some way behind, permitting status and robust revenue models (both 49%) are next on the list. This suggests investor respondents prefer pipelines that can demonstrate substantial progress with authorities – and credible revenue cases built on firm offtake, capacity markets, and ancillary services.

Cited by 41% of respondents, the potential for co-location is another major differentiator. Investors appear to favor storage solutions that can pair with renewables, data centers, or industrial loads – potentially boosting utilization and reducing merchant exposure.

Lower down the list of investors’ criteria are:

• the development stage that projects have reached (33%)
• developers’ track record and the strength of their counterparties (29%)
• the maturity of the storage technology being used (27%)

In summary, experienced developers, strong delivery records, and proven technologies help to separate mature, executable portfolios from early-stage concepts – which can be exposed to regulatory, commercial and technical uncertainty.

These factors were also cited when we asked respondents what gives investors confidence in developers in a consolidating market (see figure 8). 

The energy transition M&A market is consolidating, with total deal volume declining by 15% year‑on‑year, while value rose by around 20% (see figure 9). That reflects a shift toward fewer, larger, more strategic transactions, and a concentration of capital in high‑quality, scalable assets. 

This more selective environment can also be seen within the storage space. Here, activity is increasingly centered around established platforms, proven technologies, and execution‑ready projects, rather than early‑stage concepts. As noted, storage has continued to gain share despite the wider contraction in deal activity. It is gaining strategic importance as investors prioritize segments that combine scalability, bankability, and critical system value.

In this context, it appears the most decisive factor for investor confidence in developers is delivery track record, cited by 51% of our lawyers. Evidence that projects have been brought online – on time and to specification – is key. 

Close behind are the quality of developers’ contracts and counterparties, and indications that financial strength and delivery matter equally to them (both cited by 49%). 

Taken together, these findings suggest that robust offtake, along with strong engineering, procurement, and construction and grid-access agreements, carry the most weight – especially when paired with developers that have the balance sheet and governance to support project delivery. 

Confidence is also influenced by technology and supplier reliability (45%), on the basis that proven equipment and warranties may reduce performance risk. 

Almost two in five respondents (39%), pointed to the importance of a developer’s credit strength. And when we asked about the challenges to energy transition dealmaking, one of the top responses was financing and capital availability (24%) – reflecting tighter credit conditions. Lenders appear to be applying greater selectivity and stricter underwriting, particularly for projects with higher execution or market risks.

Lithium-ion remains the staple technology

To complete the picture when it comes to investment drivers, we asked our lawyers which storage technologies investors are most interested in (see figure 10).

The strong preference for lithium‑ion batteries (cited by 63%) reflects their continued dominance in energy storage deployment. Lithium‑ion remains the most mature, scalable, and commercially bankable storage technology – all the more so as its cost continues to decline and manufacturing capacity expands. 

While trailing some way behind, the interest in flow batteries (18%) reflects their ability to deliver long-duration discharge. They’re well suited to applications where extended storage is critical, such as grid balancing, renewable firming, and industrial or off‑grid supply.

Meanwhile, pumped hydro (also 18%) retains appeal due to its established, long-duration performance and its benefits in terms of grid stability. Compared to other technologies, pumped hydro offers significantly larger and longer discharge, greater reliability, and a longer operational lifetime. This makes it well suited for balancing during periods of renewable intermittency and for supporting system stability.

Pumped-hydro projects can, however, involve longer development timelines. But respondents still consider them to be a strategic asset class where the geographic conditions are favorable and planning frameworks are supportive.

Storage steps up to the top tier 

The data tells a consistent story. Energy storage has a strong commercial case, a growing pipeline of quality assets, and a maturing deal market.

Accordingly, our lawyers expect it to become a more prominent M&A asset class in the short to medium term. 

Most respondents (55%) indicate that it will be on a par with solar and wind generation within three years; less than a fifth (18%) take a different view. Their confidence reflects how storage has evolved from a supporting technology to a more central component in energy transactions.

Vertical integration: a hedge and a risk 

As the energy storage deals market matures, we asked our lawyers how investor strategies are evolving – starting with the question of vertical integration.

Is owning more of the value chain – for example, project development, battery supply, and operations – a viable strategy? Is it an effective way to manage cost volatility and address regulatory complexity, or does it simply introduce more risk? 

Responses were mixed (see figure 11). The largest proportion (41%) view vertical integration as both a hedge and a risk. Consolidation can strengthen control and boost resilience – but this appears more likely for companies with the scale and capabilities to handle execution and coordinate activities across the value chain. 

A similar proportion (37%) view vertical integration as a hedge against cost volatility. Tighter control of the supply chain helps to protect profit margins, while limiting exposure to fluctuating battery prices. 

More than a quarter (27%) believe it offers a competitive edge through end-to-end capabilities, faster delivery, and better alignment across project stages. Only a fifth (20%) say it’s useful for managing regulatory and policy risk, suggesting that this is a secondary consideration, not a core motivation.

Respondents also highlighted the downsides: 20% suggest it increases capital intensity and balance-sheet exposure, while 10% point to increased operational complexity and execution risk. 

Distributed storage is yet to cut through 

We also explored whether investor appetite is shifting toward decentralized storage models – such as commercial and industrial (C&I) solutions, behind-the-meter systems, and community batteries. If so, how is that affecting valuations and deal structures (see figure 12)? 

The most common response was that interest in distributed storage is moderate, not transformative. Around a third (35%) of respondents agree that decentralized storage complements utility‑scale assets, rather than replacing them. Only 8% report a strong appetite for it.                       

The impact on structures and valuations appears to be limited. 

14% of survey participants see specific structures emerging for distributed storage transactions – such as aggregation models, portfolio financing, or partnerships with technical or industrial players. When it comes to pricing, only 2% believe distributed storage deals are fetching higher valuations. 

Overall, it seems decentralized storage opportunities are dependent on the particular market context.

In summary

The energy storage transaction market is advancing rapidly. Demand is being driven by strong underlying fundamentals, and a marked shift in investor focus toward scalable, revenue-generating assets. 

For now, storage accounts for a relatively small share of energy transition transactions. But it’s the fastest-growing segment in terms of deal activity and is gaining strategic importance.

As the market matures, capital appears to be concentrating on larger, execution-ready platforms. Investors are prioritizing grid access, proven technologies, and credible delivery capabilities. 

Against this backdrop, storage is increasingly seen not as a supporting technology, but as a pillar of energy transition investment strategies for the years ahead.

Get specialist advice on Energy Storage M&A

Speak to our energy and infrastructure lawyers about navigating energy storage M&A, from grid access and revenue models to co-location, due diligence and deal execution.