Italian energy storage market shrinks by 58% in a year

Italy’s energy storage market is experiencing a sharp slowdown, with newly installed capacity falling by 58% in the 12 months to June 2026. Despite this, upcoming capacity auctions could bring an additional 24 GWh of energy storage onto the grid by 2030.

Scale of the decline

According to the latest report by ANIE Rinnovabili, based on data from transmission system operator Terna’s Gaudì database, installed energy storage capacity fell by 58% in the 12 months to June 2026, while installed power declined by 42%.

The downturn deepened further in the second quarter. Between April and June, newly installed capacity fell by as much as 82% compared with the same period in 2025, while power declined by 68%.

ANIE says the main source of weakness in the market is the residential segment, which in recent years had been the main driver of growth in Italy’s energy storage market. It has now recorded its 11th consecutive quarter of year-on-year decline, with installed capacity down 36% in the second quarter compared with the same period in 2025.

All Italian regions recorded negative year-on-year changes in the first half of 2026, both in terms of installed capacity and power.

First-half results

Between January and June, Italy added a total of 1.3 GWh of energy storage capacity, including:

• 0.9 GWh – distributed systems coupled with photovoltaic installations,
• 0.4 GWh – standalone centralized systems.

Excluding existing pumped-storage hydropower plants, the country had around 19 GWh of installed storage capacity and 8 GW of power capacity at the end of June.

Gap to national targets

ANIE estimates that the current pace of energy storage deployment is insufficient to meet the requirements set out in Italy’s national energy planning. Compared with the targets in the National Integrated Energy and Climate Plan, the country faces a gap of approximately:

• 2 GWh – in the distributed storage segment,
• 50 GWh – in the centralized storage segment.

Hopes pinned on MACSE auctions

The first auction under the MACSE mechanism is expected to provide a significant boost to growth. Terna has already awarded contracts for 10 GWh of new storage capacity, with projects due to be completed by 2027. Further competitive procedures under the MACSE and Capacity Market mechanisms are scheduled for 2026, covering an additional 16 GWh, with projects expected to enter operation by 2029.

The next MACSE auction is scheduled for 24 November, while the date of the Capacity Market procedure has yet to be set. According to ANIE, even if all awarded and planned volumes are delivered, an additional 24 GWh of energy storage will still need to be developed by 2030.

Sources of uncertainty

Several factors could affect the outlook, including the tax incentive for the residential segment, whose 50% rate was still under review at the time the report was published, as well as a possible extension of the CACER decree.

In the commercial and industrial segment, ANIE notes that the impact of Italy’s enhanced depreciation scheme still needs to be assessed. For large-scale storage, uncertainty concerns the schedule and allocation of volumes in future auctions.

The Terna-Snam scenario description document, expected by the end of September, could further change projected demand for energy storage through 2030.

Industry perspective

Raffaello Teani, chairman of ANIE’s Storage Systems working group, noted that data from Italian energy regulator ARERA show that around 0.8 TWh of renewable energy production had to be curtailed in 2025.

Teani called for the second MACSE auction to include limits on the volume that can be awarded to a single operator in order to reduce the risk of dependence on one technology. He also highlighted the need for limits on project size, given the strategic importance of energy storage to Italy’s power system.

He also called for stronger tax incentives for the residential segment and said the impact of enhanced depreciation in the commercial and industrial segment would need to be assessed.

Structure of the Italian market

According to ANIE data, at the end of the second quarter Italy had 941,911 energy storage systems in operation, with a combined power rating of 7,961 MW and storage capacity of 19.3 GWh.

The main market segments were as follows:

• residential (up to 20 kWh) – around 9.5 GWh, accounting for almost half of total installed capacity,
• commercial and industrial (20 kWh–1,000 kWh) – more than 2.2 GWh,
• large-scale (1,000 kWh–10,000 kWh) – around 0.2 GWh,
• very large-scale (above 10,000 kWh) – around 7.4 GWh.

Lithium-ion batteries accounted for 99.7% of the number of systems, 98.9% of installed power and 96.9% of installed capacity in the first half of 2026.

The residential segment remained the largest part of Italy’s energy storage fleet, with almost all systems below 20 kWh and mostly coupled with photovoltaic installations. In the first half of 2026, a total of 60,030 energy storage systems were installed, adding 593 MW of power and 1,349 MWh of capacity.