Italy Energy Storage Market: A Temporary Pullback in 2025-2026, Followed By A Strong Rebound Starting in 2027

 

The Italian energy storage market is expected to experience its second consecutive year of decline in 2025, with new installations falling to 5.1 GWh and further declining to 4.9 GWh in 2026. The residential energy storage market is expected to continue to contract in 2025, impacted by factors such as Eco-bonus subsidy cuts, falling electricity prices, and high borrowing costs. Due to the continued decline in residential PV installations, growth in this segment is limited unless the approval process for energy storage systems under 11 kWh is streamlined and energy community policies are further promoted.

 

Regarding large-scale energy storage, new installations will also decline in 2025, as some projects auctioned in 2024 have already been connected to the grid. New capacity additions in 2025-2026 will primarily come from existing auction projects and newly contracted capacity market projects. Future growth is highly dependent on the MACSE national energy storage tender mechanism, which will launch in September 2025 and aims to add 50 GWh of storage capacity by 2030. Capacity market auctions are expected to contribute 8 GWh. Italy's national transmission operator, Terna, has lowered its bulk storage target from 95 GWh to 58 GWh, reflecting reduced network flexibility caused by the transmission of renewable energy from the south to the north.

 

Commercial and industrial storage is expected to add 500 MWh in 2025 and exceed 3 GWh in 2029. Currently, the main applications for commercial and industrial storage in Italy are corporate self-use, peak shaving, and backup power. However, if future policies allow for its participation in the dispatchable market, the market is expected to expand further. However, the existing Transition 5.0 and PNRR subsidy mechanisms are limited, the application process is complex, and there is a risk of fund diversion.

 

According to the medium scenario, the Italian market will rebound strongly in 2027, with new installations reaching 10.2 GWh that year, and further increasing to 16.7 GWh in 2029. By the end of 2029, Italy's cumulative installed energy storage capacity will exceed 60 GWh, of which large-scale storage will reach 38.7 GWh.