Why US Battery Storage Just Hit a Turning Point

Most companies building clean energy projects in the US are running into the same wall: they can’t get enough compliant, affordable battery storage fast enough.

That wall just cracked.

Two deals announced this week – Samsung SDI’s first US lithium iron phosphate (LFP) cell contract and Trina Storage’s expanded 1GWh+ agreement with Lightshift Energy – signal a major shift in how grid‑scale battery energy storage systems (BESS) will be sourced and financed in the next few years.

For anyone working in green technology, from utilities to developers to climate‑tech investors, this matters because battery supply chains now decide which clean energy projects get built – and which never leave the spreadsheet.

This article breaks down what these deals really mean, how US and Asian manufacturers are repositioning around FEOC rules, and how smart teams can design storage strategies that stay bankable, compliant, and profitable.

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The big shift: US-made LFP batteries move from promise to pipeline

Samsung SDI’s new US LFP contract is a clear signal: large-scale, US-made LFP supply for stationary storage is now real, contracted, and scheduled.

Here’s the core of the announcement:

• Samsung SDI America (based in Michigan) has signed a three‑year contract starting in 2027
• Contract value: more than KRW 2 trillion (about US$1.36 billion)
• Product: US‑made prismatic LFP cells for BESS applications
• Backed by a plan for 30GWh of annual US energy storage battery capacity by the end of 2026

The customer isn’t named. Tesla is an obvious suspect, but it honestly doesn’t matter as much as people think. The bigger story is this:

The US grid storage market finally has a non‑Chinese, US‑manufactured LFP option at gigawatt‑hour scale.

For developers and asset owners, that changes the math on three fronts:

1. ITC and FEOC compliance – US‑made cells dramatically improve eligibility for investment tax credits and domestic content adders.
2. Bankability – Tier‑one brand, clear capacity ramp, and a multi‑year contract format that lenders like.
3. Form factor continuity – Samsung SDI is offering prismatic cells, not just cylindrical or pouch, which is critical for system integrators that already design around Chinese prismatic LFP.

In other words, you can keep your existing mechanical and electrical architecture and swap in a US‑compliant supplier – that’s a huge cost and schedule advantage.

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How FEOC rules are quietly rewriting battery strategy

The US government’s foreign entity of concern (FEOC) restrictions are doing exactly what they were designed to do: steer large clean energy projects away from Chinese battery content.

Here’s the blunt version:

• If your project relies on Chinese cells or certain materials above a threshold, you likely won’t qualify for key tax credits.
• Since batteries are the largest single capital cost in BESS, losing the investment tax credit (ITC) can destroy your project’s economics.

That’s why a consultant recently argued that Korean manufacturers alone may be able to cover US BESS demand within a few years. LG Energy Solution, SK On, and Samsung SDI are all:

• Retooling EV battery lines in the US for energy storage
• Committing to tens of gigawatt‑hours of annual capacity
• Designing product lines specifically with US ITC and FEOC rules in mind

And they’re not just fighting on compliance. They’re fighting on safety and form factor, because those drive insurance, permitting, and O&M costs over the system’s lifetime.

Samsung SDI, for example, is pushing:

• Aluminium casings for extra mechanical robustness
• Proprietary No Thermal Propagation (No TP) design, using thermal insulation layers between cells to contain failures
• Fully integrated BESS products like SAMSUNG Battery Box (SBB) 2.0 (LFP) and SBB 1.7 (NCA) built for utility‑scale deployments

For the broader green technology story, this is exactly where you want policy and engineering to meet: safer batteries, made closer to where they’re deployed, powering renewables at scale.

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Chinese storage players aren’t leaving the US – they’re pivoting

While Korean and US players are racing to fill the FEOC‑compliant space, Chinese integrators aren’t simply walking away. They’re getting more creative.

The expanded agreement between Trina Storage (the storage arm of Trinasolar) and Lightshift Energy is a good example of how this looks on the ground.

What’s in the deal:

• Trina will supply Elementa 2.0 and Elementa 2.5 BESS solutions
• Portfolio size: more than 1GWh of US projects
• Builds on earlier collaboration: in 2024, Trina delivered four Massachusetts sites totaling 16MW/64MWh for Lightshift

Lightshift itself is on a tear:

• Specialises in distribution‑connected storage (think batteries on local grids, not just big desert projects)
• Building what will be Vermont’s largest BESS: 16MW/52MWh, targeted for early 2026
• Raised US$100m in April 2024, US$40m in July, and US$75m in October to fund its East Coast pipeline

So how does this square with FEOC constraints and US tax credits?

Here’s what’s really happening with Chinese BESS providers:

1. Safe harbour projects
   Many developers rushed to lock in tax credit eligibility before FEOC rules fully bite. Those projects still have timelines and equipment needs, creating a short‑to‑medium‑term runway for Chinese hardware.

2. Price vs. tax credit trade‑offs
   For some customers with strong balance sheets and very short payback periods, Chinese‑made batteries are cheap enough to be attractive even without ITC. Think high‑value, fast‑cycling applications.

1. New ownership and manufacturing models
   Chinese brands are exploring FEOC‑compliant pathways: building factories in the US or friendly countries, setting up ownership structures that pass FEOC tests, and mixing third‑party cells with in‑house integration expertise.

Trina Storage already behaves more like a system integrator than a pure cell maker in many markets. Outside China, including in the US, it has used third‑party LFP cells while focusing on controls, enclosures, and project execution.

That’s smart positioning: if the cell supply chain shifts away from China, they can swap in compliant cells and keep their integration IP and project pipeline intact.

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What project developers should actually do next

Reading announcements is nice. Closing projects is better.

If you’re planning BESS assets in 2025–2028, here’s a practical way to respond to these market shifts.

1. Build a dual-track sourcing strategy

Don’t bet your entire pipeline on a single country, cell format, or vendor.

For utility and C&I portfolios, I’ve found that teams do best when they:

• Standardize around 1–2 form factors (prismatic LFP is now easier than ever in the US)
• Pre‑qualify one FEOC‑compliant supplier (e.g., Korean or US manufacturing) and one low‑cost alternative (often with Chinese roots)
• Model project returns with and without ITC so you know where a cheaper battery still works without tax credits

This isn’t over‑engineering. It’s how you keep a 500MWh+ pipeline moving when policies or prices shift late in procurement.

2. Treat safety features as a core financial variable

Thermal propagation isn’t just a technical concern, it’s a financial risk multiplier:

• More robust thermal management (like Samsung SDI’s No TP design) can reduce
  • Insurance costs
  • Local fire code friction and permitting delays
  • Long‑term O&M and derating risk

When you’re comparing ESS vendors, force the conversation past datasheet energy density. Ask:

• How is thermal runaway contained at the cell, module, and rack levels?
• What independent testing has been done on thermal propagation events?
• How are fire detection and suppression integrated into the enclosure design?

The safest product isn’t always the cheapest upfront, but it usually wins when you look at 15–20‑year project horizons.

3. Align storage specs with your grid and policy reality

Too many teams still treat batteries like generic containers of MWh. They’re not. They’re policy and grid tools.

For example, distribution‑connected systems like Lightshift’s portfolio:

• Don’t need the same duration or dispatch profile as long‑duration desert projects
• Can often justify premium equipment if it unlocks local capacity payments or avoids expensive grid upgrades

Match your technology choices to:

• Market products you’re targeting (capacity, ancillary services, arbitrage, T&D deferral)
• Regulatory incentives (ITC adders, state programs, utility tariffs)
• Connection level (transmission vs distribution) and typical congestion patterns

The reality? Most storage assets are over‑specced in one dimension and under‑specced in another. Smarter matching here often yields better returns than shaving $5/kWh off hardware cost.

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Where AI fits into this green technology shift

Since this post is part of our green technology series, it’s worth tying this back to AI, because AI isn’t just riding this storage wave – it’s steering it.

Across the BESS value chain, AI and advanced analytics are already:

• Optimizing battery dispatch to squeeze more revenue out of the same MWh
• Predicting cell and module failures before they happen, reducing downtime
• Improving energy yield forecasts for solar‑plus‑storage portfolios
• Helping planners simulate FEOC and ITC policy scenarios across multi‑year project pipelines

The companies that will win this next phase of the storage build‑out won’t just pick the right cell chemistry or form factor. They’ll combine compliant supply chains, smart integration, and AI‑driven operations into one coherent strategy.

Battery hardware is the foundation. Intelligent control turns that hardware into a competitive advantage.

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Why this moment is a turning point for US energy storage

Samsung SDI locking in a multi‑billion‑dollar US LFP contract and Trina Storage scaling its work with Lightshift Energy aren’t isolated news items. Together, they show two parallel paths for the next decade of BESS in the US:

• A rapidly maturing domestic and allied supply chain, anchored by Korean and US manufacturing and optimized for tax credits and safety
• A still‑relevant Chinese‑driven ecosystem, adapting through pricing power, new ownership structures, and integrator‑led models

For developers, utilities, and investors building the next wave of clean energy assets, the opportunity is clear: design storage portfolios that are flexible enough to use both paths, without getting trapped by policy shifts.

If your team can align FEOC‑compliant sourcing, robust safety engineering, and AI‑enabled operations, you’re not just adding batteries to projects. You’re building the backbone of a cleaner, smarter grid.

The next question isn’t whether grid‑scale storage will scale. It’s which supply chain and which strategy you’re going to hitch your business to.