Data Center Energy Storage Market Size, Share & Forecast to 2035

The Data Center Energy Storage Market covers the batteries and other stored-energy systems that keep data center IT equipment running through power disturbances and that shift or smooth campus power demand: energy storage inside centralized uninterruptible power supply (UPS) systems, battery backup units (BBU) mounted in server racks, and facility-scale battery energy storage systems (BESS) installed on data center campuses. DC Market Insights values the global Data Center Energy Storage Market at USD 4.72 billion in 2025 and forecasts USD 17.03 billion by 2035, a CAGR of 13.69%. The 2025 value is built from the build itself: about 10.5 GW of new IT capacity, of which 42% (about 4.41 GW) carries rack BBU at roughly USD 380 per kW (USD 1.68 billion) and the remaining 6.09 GW carries centralized UPS storage of 0.25 MWh per MW at a blended USD 412 per kWh (USD 627.27 million); replacement of batteries across an installed base of about 66.6 GW adds USD 1.77 billion, and about 3,000 MWh of campus BESS at USD 215 per kWh adds USD 645.00 million. Facility-scale BESS is the fastest-growing segment at 26.67% a year because AI campuses now use batteries to buffer training load swings and to win earlier grid connections, and the Middle East and Africa is the fastest-growing region at 16.30% a year as DC Market Insights expects sovereign AI campuses in Saudi Arabia and the United Arab Emirates to add capacity from a small base.

Executive Summary

The Global Data Center Energy Storage Market size was valued at USD 1.55 billion in 2020, reached USD 4.72 billion in 2025, and is anticipated to reach USD 17.03 billion by 2035, at a CAGR of 13.69% during the forecast period.

Report attribute	Details
Historical Period	2020-2024
Base Year	2025
Forecast Period	2026-2035
Data Center Energy Storage Market Size 2025	USD 4.72 Billion
Data Center Energy Storage Market, CAGR	13.69%
Data Center Energy Storage Market Size 2035	USD 17.03 Billion

The market grew at 25.01% a year between 2020 and 2025, and 2025 alone added 34.3% over 2024, as rack BBU and campus BESS spending rose in the DC Market Insights model.

Growth slows to 13.69% a year from 2025 to 2035 because battery prices keep falling: rack BBU cost per kW drops from USD 380 to USD 235 and campus BESS cost per kWh from USD 215 to USD 140 in the DC Market Insights model. New IT capacity grows from 10.5 GW in 2025 to 23.6 GW in 2035, and BESS deployed at data centers grows from about 3,000 MWh to 49,000 MWh a year.

Market Scope: What Does the Data Center Energy Storage Market Cover?

The Data Center Energy Storage Market was worth USD 4.72 billion in 2025. It covers stored-energy hardware installed in data center buildings and on data center campuses, valued at first sale in current US dollars, with 2025 as the base year and forecasts to 2035.

Included. Battery strings and cabinets for centralized UPS systems (VRLA, lithium-ion, nickel-zinc and sodium-ion), UPS flywheels, rack BBU shelves and modules with their chargers, supercapacitor modules for power smoothing, and behind-the-meter campus BESS with cells, power conversion, battery management software, enclosures and thermal management.

Excluded. UPS power electronics such as rectifiers, inverters and static switches, diesel and gas generators, fuel cells, utility-owned front-of-meter storage even when it is contracted to serve a data center, thermal energy storage for cooling, and installation labor. Readers who need the UPS electronics and generator layers can use the Data Center UPS Market and Data Center Generator Market reports.

How the segments fit together. The application split (centralized UPS, rack BBU and campus BESS) is the build layer of the model. The other splits re-cut the same total.

Market Drivers: What Drives the Data Center Energy Storage Market?

Rack battery backup units, worth USD 2.64 billion in 2025, are the largest of three growth drivers. The other two are a doubling of data center electricity demand by 2030 and grid rules that make on-site storage part of the price of a connection.

Rack Battery Backup Units Reach USD 2.64 Billion as Storage Moves into the Rack

The Open Compute Project (OCP) Open Rack V3 specification defines a BBU module with a 3 kW discharger that must deliver 3 kW for at least 4 minutes, and names lithium-ion as suitable. DC Market Insights estimates that 42% of new IT capacity carried rack BBU in 2025, rising to 55% in 2030 and 60% in 2035, and that rack BBU accounts for 56.0% of 2025 market value, the largest application. Suppliers are scaling up: Taiwanese pack maker Dynapack expects BBU supplies to AI data centers of NT$6 billion to NT$7 billion in 2026, with 8 kW and 12 kW BBUs entering mass production in the fourth quarter.

Data Center Electricity Use Doubles to About 945 TWh by 2030

The International Energy Agency (IEA) estimates that data centers used around 415 terawatt hours (TWh) of electricity in 2024 and projects consumption to roughly double to around 945 TWh by 2030 (Source: IEA Energy and AI). BloombergNEF counted 23.1 GW of data center capacity under construction globally across 831 sites, with 15.9 GW of it in the United States, and says US data center power demand could reach 106 GW in 2035. DC Market Insights models new IT capacity rising from 10.5 GW in 2025 to 19.5 GW in 2030 and 23.6 GW in 2035, which lifts the installed base from about 66.6 GW to about 239.6 GW.

Grid Rules Make On-Site Storage Part of the Connection

In December 2025, Ireland’s Commission for Regulation of Utilities (CRU) decided that new data centers will continue to be required to provide generation and/or storage capacity, either on site or nearby (Source: CRU decision). Texas Senate Bill 6, signed on June 21, 2025, expects large loads with on-site generation able to serve 50% of their demand to provide information about it to their utility and to ERCOT, which may require them to use that generation or curtail load in a grid emergency. In June 2026, the Federal Energy Regulatory Commission (FERC) issued show-cause orders to six grid operators on large-load interconnection rules, including new transmission services for flexible large loads. NVIDIA’s guidance for AI factories warns that sites without BESS may face longer delays in getting power.

Market Trends: How Is Data Center Energy Storage Changing?

Lithium-ion holds 82.9% of 2025 value. Storage is shifting from minutes of backup in a battery room to campus batteries that also smooth AI load swings, and second-life and long-duration systems are entering the mix.

Campus BESS Grows 26.67% a Year as AI Sites Buffer Load Swings

NVIDIA states that a well-designed BESS can buffer fast load swings and improve power quality, and it added energy storage elements, specifically electrolytic capacitors, to its GB300 NVL72 power shelves and says they can reduce peak grid demand by up to 30%. At campus scale, by May 2025 xAI had installed 168 Tesla Megapack units at its Colossus supercomputer in Memphis and in November 2025 was set to deploy more than USD 375 million of Megapacks at Colossus II (Source: Data Center Dynamics news reports). Fluence booked USD 850 million of data center deals in its quarter reported in August 2026 (Source: Energy-Storage.news report), and Energy Vault signed a deal the same month to supply battery storage for a 1.25 GW off-grid deployment at a hyperscaler AI campus in Texas (Source: pv magazine USA report).

Lithium-Ion Takes 82.9% of Market Value

Lithium-ion replaces VRLA because it lasts longer. Vertiv states that lithium-ion UPS batteries last 8 to 10 years or more, two to three times the life of VRLA units (Source: Vertiv article), and Eaton launched its Eaton Samsung Gen 3 lithium-ion battery system for data center UPS in December 2024 with performance guaranteed for up to 12 years (Source: Eaton announcement). Lithium-ion value rises from USD 3.91 billion in 2025 to USD 15.45 billion in 2035 in the model, while VRLA value falls from USD 623.02 million to USD 234.80 million, a decline of 9.30% a year.

Second-Life and Long-Duration Storage Enter the Campus

In June 2025, Redwood Materials launched its Redwood Energy business and, with Crusoe, built a 12 MW and 63 MWh microgrid in Nevada using second-life electric vehicle batteries; by March 2026 the system had delivered 99.2% operational availability and was being expanded to support 20 additional Crusoe Spark modular data centers (Source: Crusoe and Redwood Materials announcements). Google signed its first long-duration energy storage partnership with Energy Dome in July 2025, and in February 2026 Google and Xcel Energy announced plans that include a 300 MW and 30 GWh iron-air battery from Form Energy (Source: Data Center Dynamics and Utility Dive reports).

Market Challenges: What Holds the Data Center Energy Storage Market Back?

US turnkey BESS prices of USD 219 per kWh in 2025, against a global average of USD 117, are one of two main constraints. The other is battery fire risk.

A Lithium-Ion Fire Took 647 Government Systems Offline

On September 26, 2025, sparks from a lithium-ion battery started a fire at South Korea’s National Information Resources Service (NIRS) data center in Daejeon that knocked 647 systems offline, including 436 public-facing services. The UPS system, lithium-ion batteries and servers were all housed in the same room. DC Market Insights expects incidents of this kind to push operators toward separate battery rooms and outdoor BESS enclosures, which add cost per kWh.

Storage Costs Most Where Data Centers Are Built

BloombergNEF’s 2025 energy storage system cost survey puts the global average price of a turnkey BESS at USD 117 per kWh, but USD 219 per kWh in the United States and USD 177 in Europe, against USD 73 in China. The United States hosts most of the world’s data center construction, so the largest buyer pays the highest price. The model prices 2025 data center BESS at USD 215 per kWh, close to the US figure, falling to USD 140 by 2035.

Market Opportunities: Where Are the New Revenue Pools?

GPU and neocloud operators, growing at 16.51% a year, are the fastest-growing buyer group. Replacement and retrofit work is the second new revenue pool, rising from USD 1.85 billion to USD 7.39 billion in the model.

GPU and Neocloud Operators Spend USD 3.83 billion by 2035

Specialist GPU cloud operators spent USD 830.91 million on energy storage in 2025, rising to USD 3.83 billion in 2035 in the model. They often build before the grid is ready. Redwood says its pipeline includes hyperscalers and projects of multiple gigawatt hours.

Batteries That Bring Sites Online Sooner

In August 2026, Cummins won its largest BESS contract, for an unnamed large US data center. In October 2025, Aligned Data Centers partnered with Calibrant to deliver a 31 MW and 62 MWh on-site BESS at a Pacific Northwest campus, and in March 2026 Canadian Solar’s e-STORAGE unit won a 500 MW and 2,493 MWh BESS supply deal to support data center grid infrastructure. DC Market Insights estimates that replacement and retrofit work, including VRLA strings converted to lithium-ion, accounts for 39.2% of 2025 value and grows at 14.86% a year.

Pricing: How Much Does Data Center Energy Storage Cost?

Rack BBU costs about USD 380 per kW in 2025. A centralized UPS battery system costs about USD 412 per kWh on a blended lithium-ion and VRLA basis in 2025, or about USD 0.10 million per MW of IT load at 0.25 MWh per MW, and campus BESS about USD 215 per kWh. These are DC Market Insights estimates for installed equipment, excluding labor.

Storage price (USD)	2020	2025	2030	2035
Lithium-ion UPS battery system, per kWh	700	520	430	360
VRLA UPS battery system, per kWh	300	280	270	260
Rack BBU, per kW of backed-up IT load	420	380	300	235
Data center BESS, per kWh	380	215	168	140

Cell prices set the floor. BloombergNEF’s 2025 survey found an average lithium-ion pack price of a record low USD 108 per kWh, with stationary storage packs at USD 70 per kWh, and global average turnkey BESS prices of USD 124 per kWh for 2-hour systems and USD 110 per kWh for 4-hour systems. UPS and BBU storage costs more per kWh because it is built for high discharge rates over minutes.

Standards and Regulation: Which Rules Shape Data Center Energy Storage?

NFPA 855, now in its 2026 edition, leads the 4 rule sets for data center storage. The others are the UL 9540 and UL 9540A safety standards, the IEC 62619 cell standard and the OCP rack specifications.

NFPA 855 (2026 edition). The National Fire Protection Association (NFPA) Standard for the Installation of Stationary Energy Storage Systems governs how battery rooms and outdoor BESS are installed.

UL 9540 and UL 9540A. UL 9540 is the system safety standard and covers electrical, electrochemical, mechanical and other types of energy storage technologies. UL 9540A is the test method for thermal runaway fire propagation and is explicitly cited in NFPA 855 for large-scale fire testing.

IEC 62619:2022. The International Electrotechnical Commission (IEC) standard specifies requirements and tests for the safe operation of secondary lithium cells and batteries in industrial applications, including stationary applications.

OCP Open Rack V3 BBU. The Open Compute Project specification sets a 3 kW BBU module that must discharge for at least 4 minutes, which sets a minimum backup energy per module.

Market Segmentation: Which Segment Leads the Data Center Energy Storage Market?

Lithium-ion leads with 82.9% of 2025 value. Rack BBU leads applications with 56.0%, and hyperscale data centers lead buyers with 50.1%. Facility-scale BESS is the fastest-growing segment at 26.67% a year, against 11.89% for rack BBU and 3.61% for centralized UPS storage, because AI campuses add batteries to manage load swings and grid access, not only outages.

By Application: Rack BBU Leads with 56.0%

Application	2025 (USD billion)	Share 2025	2035 (USD billion)	CAGR 2025-2035
Rack-Level Battery Backup Units (BBU)	2.64	56.0%	8.13	11.89%
Centralized UPS Energy Storage	1.43	30.3%	2.04	3.61%
Facility-Scale Battery Energy Storage Systems (BESS)	0.65	13.7%	6.86	26.67%

Campus BESS rises from 13.7% of market value in 2025 to 40.3% in 2035 in the base case. Centralized UPS storage grows only 3.61% a year because cheaper lithium-ion strings last longer than the VRLA strings they replace.

By Technology: Lithium-Ion Leads with 82.9%

Technology	2025 (USD billion)	Share 2025	2035 (USD billion)	CAGR 2025-2035
Lithium-Ion	3.91	82.9%	15.45	14.72%
Lead-Acid (VRLA)	0.62	13.2%	0.23	-9.30%
Supercapacitors	0.08	1.7%	0.49	19.92%
Flywheels	0.06	1.4%	0.07	1.04%
Nickel-Zinc and Sodium-Ion	0.03	0.6%	0.10	13.55%
Long-Duration Storage	0.01	0.3%	0.69	48.79%

Long-duration storage grows fastest from a small base as iron-air and carbon dioxide batteries reach data center campuses. Flywheels hold a steady niche.

By Data Center Type: Hyperscale Data Centers Lead with 50.1%

Data center type	2025 (USD billion)	Share 2025	2035 (USD billion)	CAGR 2025-2035
Hyperscale Data Centers	2.37	50.1%	8.64	13.83%
Colocation Data Centers	0.92	19.5%	3.44	14.08%
GPU and Neocloud Providers	0.83	17.6%	3.83	16.51%
Enterprise Data Centers	0.47	10.0%	0.78	5.08%
Edge Data Centers	0.13	2.7%	0.34	10.35%

Hyperscale operators buy most rack BBU, colocation providers buy the largest share of centralized UPS storage, and GPU and neocloud providers grow fastest.

By Component: Cells and Modules Lead with 49.6%

Cells and modules are worth USD 2.34 billion in 2025 and USD 7.46 billion by 2035. Power conversion and chargers are worth USD 1.07 billion (22.7%) and grow fastest among components at 15.05% a year because each BBU module and each BESS block carries its own converter.

By Deployment: New Builds Lead with 60.8%

New builds account for USD 2.87 billion of 2025 value and reach USD 9.64 billion by 2035, a CAGR of 12.87%. Replacement and retrofit work is worth USD 1.85 billion and grows faster at 14.86% a year because the DC Market Insights model replaces BBU modules about every five years.

DC Exclusive: The Storage Architecture × Data Center Type Matrix

At USD 1.85 billion in 2025, hyperscale rack BBU is the single largest cell of the matrix and 39.2% of all data center energy storage spending. It is a DC Market Insights model built from 56 inputs: 16 annual IT capacity cohorts (2020 to 2035), 16 annual BESS deployment cohorts, 4 price curves (lithium-ion UPS, VRLA, rack BBU and BESS), 15 buyer weights (3 architectures × 5 data center types) and 5 regional splits.

2025, USD billion	Centralized UPS	Rack BBU	Campus BESS	Total
Hyperscale Data Centers	0.26	1.85	0.26	2.37
Colocation Data Centers	0.60	0.21	0.11	0.92
Enterprise Data Centers	0.40	0.05	0.02	0.47
GPU and Neocloud Providers	0.06	0.53	0.25	0.83
Edge Data Centers	0.11	0.00	0.01	0.13
Total	1.43	2.64	0.65	4.72

Hyperscale operators spend 78% of their storage budget on rack BBU, while colocation providers spend 65% on centralized UPS storage. GPU and neocloud providers already spend 29% of their storage budget on campus BESS, the highest share of any buyer type, which reflects sites such as xAI’s Colossus where batteries manage both outages and load swings.

The key inputs are new IT capacity (10.5 GW in 2025), the rack BBU share of it (42%) and BESS deployed at data centers (about 3,000 MWh). The assumptions are explained on our research methodology page.

Regional Insights: Which Region Leads the Data Center Energy Storage Market?

North America leads with 45.2% of 2025 value. The Middle East and Africa is the fastest-growing region at 16.30% a year, because DC Market Insights expects sovereign AI programs in Saudi Arabia and the United Arab Emirates to add capacity from a small base.

North America Leads with 45.2% Share

North American operators spent USD 2.13 billion on data center energy storage in 2025, and the region is forecast to reach USD 7.07 billion in 2035, a CAGR of 12.72%. The United States hosts 15.9 GW of the 23.1 GW under construction worldwide according to BloombergNEF.

Asia Pacific Holds 27.1% Share

Asia Pacific is worth USD 1.28 billion in 2025 and USD 5.11 billion by 2035, a CAGR of 14.85%. DC Market Insights expects India, Malaysia and Australia to add the most new capacity outside China.

Europe Holds 17.6% Share

Europe is worth USD 830.69 million in 2025 and USD 2.72 billion by 2035, a CAGR of 12.61%. DC Market Insights expects Ireland’s requirement for on-site or nearby generation and storage to make it the most storage-intensive European market per MW.

Latin America Holds 4.6% Share

Latin America is worth USD 217.11 million in 2025 and USD 953.56 million by 2035, a CAGR of 15.95%, with DC Market Insights assuming longer battery runtimes than in North America.

Middle East and Africa Holds 5.5% Share

The Middle East and Africa is worth USD 259.59 million in 2025 and USD 1.17 billion by 2035, growing fastest at 16.30% a year.

Country Analysis: Which Countries Spend the Most on Data Center Energy Storage?

The United States leads with USD 1.91 billion in 2025. That is 40.5% of global value, followed by China at USD 460.47 million (9.8%) and Canada at USD 224.00 million (4.7%). The 12 largest countries account for 79.7% of 2025 spending.

Rank	Country	Region	2025 (USD billion)	Share 2025	2035 (USD billion)	CAGR 2025-2035
1	United States	North America	1.91	40.5%	6.22	12.53%
2	China	Asia Pacific	0.46	9.8%	1.69	13.86%
3	Canada	North America	0.22	4.7%	0.85	14.24%
4	United Kingdom	Europe	0.18	3.9%	0.54	11.54%
5	Japan	Asia Pacific	0.18	3.8%	0.61	13.10%
6	Germany	Europe	0.17	3.7%	0.57	12.61%
7	India	Asia Pacific	0.13	2.7%	0.77	19.60%
8	Australia	Asia Pacific	0.12	2.4%	0.46	14.85%
9	France	Europe	0.11	2.3%	0.37	13.04%
10	Brazil	Latin America	0.10	2.1%	0.44	16.20%
11	Netherlands	Europe	0.09	1.9%	0.27	11.54%
12	South Korea	Asia Pacific	0.09	1.9%	0.33	14.00%

India is the fastest-growing large country market at 19.60% a year, as hyperscale and colocation operators add new capacity from a small base. The country figures are a DC Market Insights allocation of the regional totals, weighted by each country’s estimated share of installed and new data center capacity.

Forecast Scenarios: How Could the 2035 Forecast Change?

The base case reaches USD 17.03 billion by 2035. Scenarios give a range of USD 13.62 billion to USD 20.09 billion across the low and high scenarios.

Scenario	Assumption from 2026	2035 (USD billion)	CAGR 2025-2035
Low	Capacity additions 15% below base; campus BESS deployments about a third below base	13.62	11.18%
Base	Additions rise to 23.6 GW a year; data center BESS reaches 49,000 MWh a year	17.03	13.69%
High	Additions 10% above base; grid rules require storage at most new AI campuses	20.09	15.59%

The low case reflects a pause in AI capital spending and slower adoption of campus BESS outside the United States. The high case assumes that more regulators follow Ireland in tying grid connections to on-site storage.

Competitive Insights: Who Leads the Data Center Energy Storage Market?

• Panasonic Energy
• Tesla
• Vertiv
• Schneider Electric
• Eaton
• EnerSys
• Samsung SDI
• Fluence
• Delta Electronics
• Dynapack
• Energy Vault
• Canadian Solar (e-STORAGE)
• Cummins
• Redwood Materials
• Form Energy
• ZincFive

Panasonic Energy is estimated to be the largest supplier, with more than 40% of 2025 value (DC Market Insights estimate). Panasonic targets data-center energy storage sales of approximately 1 trillion yen in the fiscal year ending March 2029, about three times the fiscal 2026 level. DC Market Insights reads this as roughly 333 billion yen of such sales in the fiscal year ended March 2026, about USD 2.22 billion at an assumed 150 yen per US dollar. DC Market Insights estimates that Tesla leads campus BESS: it deployed 46.7 GWh of energy storage across all markets in 2025, and xAI’s Colossus sites in Memphis use Tesla Megapacks. EnerSys reported fiscal 2026 net sales of USD 3.75 billion and said strength in its data center business drove favorable price and mix, with a lithium data center solution in its product pipeline (Source: EnerSys filing with the US Securities and Exchange Commission). Vertiv (second-quarter 2026 net sales of USD 3.27 billion), Schneider Electric and Eaton sell UPS battery systems with their UPS platforms, and Eaton sells the Eaton Samsung Gen 3 lithium-ion battery system. Fluence, Energy Vault and Cummins won data center BESS orders in 2026, and Canadian Solar’s e-STORAGE won a BESS order to support data center grid infrastructure.

Recent Developments

• In May 2025, xAI was reported to have installed 168 Tesla Megapack battery energy storage units at its Colossus supercomputer in Memphis, Tennessee (Source: Data Center Dynamics news report).
• In June 2025, Redwood Materials launched Redwood Energy and, with Crusoe, unveiled a 12 MW and 63 MWh microgrid in Nevada built from second-life electric vehicle batteries to power an AI data center (Source: Crusoe press release).
• In October 2025, Aligned Data Centers partnered with Calibrant to deliver a 31 MW and 62 MWh on-site battery energy storage system at its Pacific Northwest campus (Source: Dallas Innovates news report).
• In February 2026, Google and Xcel Energy announced plans for a new Google data center in Minnesota that include a 300 MW and 30 GWh iron-air battery from Form Energy (Source: Utility Dive news report).
• In May 2026, Fluence signed two master supply agreements with major hyperscale data centers (Source: Data Center Dynamics news report).
• In August 2026, Energy Vault signed a deal to supply battery storage and power conversion for a 1.25 GW off-grid deployment at a hyperscaler’s AI data center in Texas (Source: pv magazine USA news report).

We follow these deals, launches and capacity announcements as they happen in our data center industry updates.

Methodology: How We Built the Data Center Energy Storage Market Model

DC Market Insights built this market bottom-up from 16 annual IT capacity cohorts (2020 to 2035). The installed base of about 57 GW of IT capacity at the end of 2024 is derived from the IEA estimate of around 415 TWh of data center electricity use in 2024, at an assumed power usage effectiveness of 1.4 and average utilization of 60%. Each year’s new capacity is split between rack BBU (42% in 2025) and centralized UPS storage at 0.25 MWh per MW, priced with separate lithium-ion and VRLA cost curves. Replacement spending is added on the installed base, with VRLA strings replaced every 5 years, lithium-ion UPS strings every 10 years and BBU modules every 5 years. Campus BESS is modeled from 16 annual deployment cohorts in MWh, priced per kWh. The total was split by 3 applications, 6 technologies, 5 data center types, 4 components, 2 deployment types and 5 regions, and every split sums to the market total. The result was checked against bound checks: a floor from named 2025 deployments (the 168 Megapacks reported at Colossus by May 2025 and the 63 MWh Redwood and Crusoe microgrid sit well inside the 3,000 MWh modeled for 2025), a ceiling from Tesla’s 46.7 GWh of total 2025 storage deployments, and the Panasonic Energy data-center storage sales level implied by its targets, which sits inside the modeled lithium-ion value of USD 3.91 billion.