Storage is the winner in the post-OBBBA energy space, report says

Despite the political tumult that has pockmarked the US energy landscape in 2025, many developers, investors and lenders remain cautiously optimistic about what’s next for energy storage.  

Law firm Troutman Pepper Locke’s new report, “Brave New World: What’s Next for US Energy Storage After OBBBA and Amid Continued Tariff Risk?” breaks down how the industry is already adapting to the regulatory and tariff uncertainties that have followed in the wake of the One Big Beautiful Bill Act (OBBBA) and escalating supply chain risks. 

While wind and solar tax credits will phase out by the end of 2027, storage credits will not expire until after 2033.  

The fact that energy storage walked away from the bill relatively scot-free brought a small amount of stability back into the picture. According to Andrew Waranch, CEO of Miami-headquartered developer Spearmint Energy, investors stopped “sitting on their wallets” because “the OBBBA gave people some clarity.” He’s already seen a “massive uptick in investor interest in storage” following the law’s passage. 

Still, the report notes that supply chain and policy hurdles temper an otherwise optimistic outlook for storage. Per the OBBBA, new foreign entity of concern (FEOC) rules will take effect in 2026 and prevent projects with links to Chinese-owned companies from accessing tax incentives. Domestic manufacturing and diverse supply strategies are both rising but can’t yet keep up with projected demand.  

While there “were shades of the FEOC rules before [the OBBBA],” a vice president at a leading investment bank explained in the report, the focus is now more on getting construction started to sneak in under the wire before the updated guidelines go into effect.  

Even so, the report warns that there simply isn’t enough time between now and the implementation of the FEOC rules to fully turn away from Chinese manufacturing. Tom Cornell, CEO of battery company Prevalon, noted that the restrictions are “handicapping the industry pretty significantly,” as reorienting the battery supply chain away from China will be tricky. 

A volatile tariff environment is only worsening the uncertainty. Earlier this year, rates on Chinese non-EV lithium-ion batteries spiked to 145% before being cut to 30%. Some developers responded by warehousing products in Canada to time imports or splitting shipments to non-US destinations until conditions improved.  

Troutman Pepper Locke also pointed out that some companies did anticipate the risks and started sourcing modules from outside of China well before the 2024 election, even as early as May that year. Others, including Tesla and Canadian Solar, announced new US battery and BESS manufacturing facilities as a hedge against future disruptions 

Still, the bank vice president also pointed out that the fact that storage tax credits will continue is “pretty helpful in offsetting some of the price increases that would be driven by the tariffs.” 

However, the phase out of solar and wind tax credits risks rapid market consolidation, as lenders and asset owners in both fields are beginning to shift their focus to storage. Waranch said storage companies are benefiting from “being able to pick up really strong developers on the solar side” and the potential to jump ahead in interconnection queues.