‘A good step forward for domestic manufacturing’: Peak Energy on the US energy storage industry after the reconciliation bill

As the bill has been signed into law on 4 July, energy storage projects in the US that start construction before the end of 2033 will continue to qualify for investment tax credit (ITC) incentives.

However, under the Foreign Entity of Concern (FEOC) regulations, to qualify for ITCs, starting in 2026 at least 55% of a project’s equipment (by costs) must come from non-prohibited foreign entities, increasing to 75% by 2030 and beyond.

While uncertainties remain around tariff policies and additional government support, there is now more clarity for developers to begin working from than in recent months.

Peak Energy is a US-based sodium-ion battery energy storage system (BESS) startup. At the end of 2024, Peak Energy opened a battery cell engineering centre in Broomfield, Colorado. Speaking with ESN at that time, Dales explained the company’s goal of being the scale-up partner of choice” to bring sodium-ion technology to market.

We hear from Dales now after the signing of the so-called “One Big Beautiful Bill” Act.

The CCO of Peak Energy believes that the domestic battery industry will benefit from the Act as it is signed into law.

Dales notes that the world has changed post-bill, and the industry will have losers and winners as a result.

“I think we’re seeing among our customers, the independent power producers (IPPs) and utilities, folks who have been leaning toward domestic content, I think, are well-positioned to take advantage of the change.”

He continues, “For companies like Peak Energy that are trying to build out the domestic supply chain for batteries, this is a really good step forward.”

To Dales and others, the Act is a helpful step in building out a domestic supply chain for batteries, in part because it makes it “much more difficult for pure-play Chinese players to come in and continue to dominate the industry.”

In addition to the FEOC restrictions for the ITC, developers also have tariffs to be concerned about.

Thus far, the US president’s tariff policies have been anything but clear, with announcements often coming last minute and from different sources within the government.

Even countries not designated as an FEOC, such as the Philippines, currently have a 20% tariff rate threatened to take effect on 1 August.

Using domestic content would be a reliable option for developers, but the US does not currently have a battery supply chain to support its demand.

This places Peak Energy and other companies in a unique position to fill a need, quickly, Dales said.

As Dales says about Peak: “We are accelerating our plans for domestic manufacturing, now that the rules of the road are defined. And I think we and our financial partners have been waiting for that to happen.”

“Without supportive policies, you know, the economics would drive you to go build offshore, but with the policies in place to support the national security argument. It makes it, I think, a really attractive business to go build here in the US.”

Earlier this month, energy storage analyst at BloombergNEF (BNEF) Isshu Kikuma noted that the Trump administration values electric system reliability over transitioning from fossil fuels, which may have helped energy storage in the bill’s final form.

Dales agrees with this sentiment, noting that regardless of political position, the increase in demand on the US power grid is a genuine concern and needs to be met somehow.

“If you’re not going to add new generation in the form of renewables, which can certainly be deployed quickly, your only other option, really, is to add storage to the grid. Use it to mitigate the peaks and bring the base up so it’s essentially a virtual addition of capacity to the grid.”

“In the end, from a national security perspective, it’s one of a handful of really critical technologies that there’s a bipartisan consensus that we need to control our own destiny, and the ability to store energy is one of the critical needs in the economy.”

Domestic manufacturers continue to encounter hurdles in cost management and large-scale production. However, if these policies function as intended, they should create a more defined pathway for manufacturers to reach these objectives.

When previously speaking with ESN, Dales said that Peak sees a “crossover point” in the next few years where sodium-ion becomes more competitive than lithium iron phosphate (LFP) at the system level.

He says of the company currently: “We’re in the process of deploying the first large-scale sodium batteries in the United States this year.”