On-Grid Solar Systems: North America Battery Storage Growth Through 2035
The North American on-grid solar market is entering a decisive decade of expansion, with utility-scale deployments and grid modernization efforts driving momentum toward 2035. As aging power infrastructure meets rising electricity demand, grid-connected solar paired with battery storage is emerging as a central pillar of the region’s energy transition.
Utility-Scale Solar Leads the Charge
On-grid solar systems, which feed electricity directly into the public utility network, are gaining ground across the United States, Canada, and Mexico. Utility-scale projects, in particular, are expected to account for the largest share of new capacity through 2035. These installations benefit from economies of scale, falling module prices, and long-term power purchase agreements that make solar increasingly competitive with conventional generation sources.
Grid modernization initiatives are supporting this growth. Federal and state-level programs in the U.S. are channeling investment into transmission upgrades, smart grid technology, and interconnection improvements, which are essential for accommodating variable renewable generation.
Battery Storage Becomes a Core Component
Battery energy storage is transforming how on-grid solar operates. Storage systems allow surplus daytime solar generation to be dispatched during evening peak hours, smoothing output and improving grid reliability. Across North America, solar-plus-storage projects are becoming standard for new utility developments, with storage capacity often matching or exceeding the paired solar array.
Key drivers behind the storage boom include:
- Declining lithium-ion battery costs
- State-level storage mandates and incentives
- Increased demand for grid resilience following extreme weather events
- Integration of renewables into wholesale energy markets
Policy Support Shaping the Market
The Inflation Reduction Act (IRA) continues to be a major catalyst for on-grid solar and storage deployments in the United States. Its long-term tax credits for solar generation and standalone storage have unlocked billions in capital investment. Canada’s Clean Technology Investment Tax Credit and Mexico’s growing renewable auctions are adding regional momentum.
State-level renewable portfolio standards, particularly in California, Texas, New York, and Arizona, are pushing utilities to procure more solar capacity paired with storage. Texas has emerged as one of the fastest-growing solar and storage markets, driven by ERCOT’s competitive wholesale market structure.
Distributed Generation and Commercial Applications
While utility-scale projects dominate headlines, commercial and industrial (C&I) on-grid solar is also expanding. Corporations pursuing net-zero targets are signing virtual power purchase agreements and installing rooftop and carport solar systems. Data centers, manufacturers, and logistics operators are increasingly turning to on-grid solar to hedge against electricity price volatility.
Residential on-grid solar continues to grow steadily, though at a slower pace than utility installations. Net metering reforms in states like California have shifted the residential market toward solar-plus-storage configurations, aligning household systems more closely with grid needs.
Challenges Ahead
Despite favorable conditions, the sector faces obstacles that could shape