1. EU’s answer to the US Inflation Reduction Act (IRA) expected to become law in summer with provisions effective from 2026
2. European energy storage industry likely to benefit from the Net Zero Industry Act (NZIA) to improve energy transition and industrial competitiveness
3. China leads in battery production with companies like EVE Energy delivering significant capacity, while the US and Europe see growth in battery production capacity and projects.
The EU’s answer to the US Inflation Reduction Act (IRA) is expected to become law this summer, with provisions effective from 2026. This act is likely to be welcomed by the European energy storage industry and the solar industry manufacturers’ group European Solar Manufacturing Council (ESMC). Europe had been ahead of the US in battery gigafactories, but the IRA shifted the situation in the US’s favor by offering tax credit incentives for projects using domestic content.
Although European manufacturing plans are still in progress, the continent has been deprioritized as an investment destination for the battery value chain in the short term. The Net Zero Industry Act (NZIA) could offer a potential solution to support Europe’s energy transition and industrial competitiveness. The US Department of the Treasury has finalized rules on tax credit transferability for eligible energy technologies, including energy storage.
The International Energy Agency produced a special report on the importance of batteries in the global energy transition, highlighting China’s dominance in battery cell production. Chinese companies like Sungrow and EVE Energy are leading in the energy storage industry but face competition from companies like Tesla. The industry is anticipating advancements in energy storage technology, with some skepticism around claims of zero degradation in battery performance. Additionally, Canada’s efforts to localize battery manufacturing could help leverage domestic content incentives. Market saturation in the ERCOT ancillary services market in Texas is already occurring due to the rapid buildout of battery energy storage systems.