Still buying grid batteries like it is 2019? That is the procurement equivalent of overnighting a server by carrier pigeon.

The quick take

A new analysis indicates the US could meet its entire battery energy storage system demand with domestically produced cells within a few years, reshaping costs, tax credit math, and risk for developers and utilities. If domestic graphite and lithium projects keep pace, storage buyers could cut import exposure to Asia, qualify for the IRA’s domestic content bonus, shorten lead times, and improve bankability for 2026–2028 projects, as noted in this analysis.

The problem

Storage procurement has been a juggling act: global shipping delays, component shortages, tariffs, FEOC restrictions, and uncertain delivery windows can turn an otherwise solid IRR into a moving target. A 2025 build might sail smoothly, while a 2026 clone stalls on component origin. Developers see record demand but also warnings of a near term deployment dip tied to sourcing rules and policy uncertainty, per Utility Dive reporting.

The solution

More US cell capacity, paired with US-made anodes and domestic lithium refining, is the escape hatch. US manufacturers are pivoting lines from EVs to grid storage, and system integrators already have robust domestic assembly footprints. The gap has been cell capacity and materials. Both are now catching up.

Evidence that the shift is real

• US utility-scale storage additions are hitting records, with strong pipelines through the mid-2020s, as shown in EIA’s Today in Energy and in market outlooks from Canary Media citing BNEF.
• Industry groups tally more than $100 billion in announced US storage manufacturing and supply chain investments, summarized in ACP’s 2025 explainer.
• Domestic anode material is coming online: Syrah’s Vidalia AAM facility is in production and supported by DOE LPO, per Syrah and DOE LPO.
• US lithium supply is advancing: construction continues at Lithium Americas’ Thacker Pass, with production targeted mid decade, per the company.
• Manufacturers are increasingly prioritizing LFP chemistry for grid storage due to cycle life and safety advantages, aligning with integrator roadmaps referenced in RMI’s manufacturing brief.

Cost math in 2026–2028

Standalone storage qualifies for a 30 percent ITC under the IRA, with potential 10 percentage point bonuses for domestic content and energy communities, subject to prevailing wage and apprenticeship rules. Treasury and IRS guidance for the domestic content bonus and 45X manufacturing credit continue to firm up, which strengthens US cost competitiveness as production scales.

• Domestic content bonus and ITC guidance: see IRS and Treasury resources for energy storage ITC and domestic content clarifications (IRS, Treasury).
• 45X production credits for battery materials can lower domestic component costs directly, improving system CAPEX when paired with US-sourced cells and packs, as outlined in ACP and Treasury.
• Policy friction, including Section 301 tariffs and FEOC sourcing restrictions, remains a headwind for imports and can erode schedule certainty, flagged in Utility Dive.

Supply chain shifts to watch

• Graphite anodes: Beyond Syrah’s Vidalia, Novonix is advancing a Baytown, Texas anode plant, per the company and recent coverage in Reuters. Anovion is progressing its US anode plans, per Anovion.
• Lithium refining: Production expansions at existing US facilities and new projects like Thacker Pass can de-risk supply and logistics, per Lithium Americas and industry trackers.
• Integration and assembly: US integrators already assemble racks, enclosures, and PCS domestically, which means local cells and materials are the remaining unlock for full domestic content alignment, noted in this analysis.

What to do if you are buying storage in 2026–2028

• Prioritize US-made cells in RFPs. Specify FEOC-compliant components and request traceability packages to qualify for the domestic content bonus. Tie liquidated damages to component origin changes.
• Stack IRA incentives methodically. Confirm prevailing wage and apprentice compliance, then model the domestic content and energy community bonuses. A 40 to 50 percent effective ITC is possible on eligible projects with proper compliance, per IRS guidance.
• Pick chemistries for duty cycle, not hype. LFP remains the grid workhorse for 2 to 4 hour systems. NMC can fit space-constrained sites, but warranty and degradation terms matter more than the acronym.
• Secure multi year offtakes with US anode and lithium suppliers. Syrah’s Vidalia and upcoming US anode plants reduce import risk. Align cell procurement with domestic upstream to strengthen bankability, per DOE LPO and Syrah.
• Shorten lead times by collapsing the ocean. Domestic cells avoid ocean freight and customs delays. Integrators can stage faster with US logistics hubs and local QA, as highlighted by recent deployment surges in EIA data.
• Calibrate route to market. In solar rich regions, a solar plus storage PPA with a domestic content compliant BESS can beat merchant volatility. In ERCOT and CAISO, merchant and tolling hybrids can benefit from faster commissioning and fewer import risks, per market outlooks in BNEF coverage.

Risks and caveats

• Policy guidance is evolving. Treat domestic content calculations and FEOC definitions as living documents. Check the latest IRS and Treasury updates before locking contracts (Treasury, IRS).
• Project execution still matters. Domestic cells do not magically fix late interconnections, thin EPC benches, or transformer lead times.
• Cost curves can wobble. If EV demand whipsaws, manufacturers may reallocate capacity. Keep dual track supplier options through NTP.

Bottom line

US battery manufacturing looks poised to shoulder the nation’s grid storage needs by 2028. Pair that capacity with domestic graphite and lithium, and developers can trade tariff and import risk for bonus credits, faster schedules, and stronger bankability. It is not a free lunch, but for storage buyers who align procurement with US supply chains and IRA compliance, it is close.