Solmar Insights
A new analysis from the Electric Power Research Institute reveals a dramatic improvement in the reliability of lithium-ion battery storage, with global failure rates down 98 percent between 2018 and 2025. Despite these advances, the report warns that older battery systems, commissioned before more stringent codes, still pose a higher operational risk and could require targeted safety interventions.
Key figures
98% drop in global BESS failure rates, 2018 to 2025
Stationary BESS annual failure rates: 0.04% to 0.14%
50% reduction in failures from 2024 to 2025
Failure rate trends and drivers
The EPRI study, leveraging its battery energy storage system (BESS) failure incident database, documents a 98 percent reduction in storage failures worldwide over a seven-year span. From 2018 through 2025, continual advances in lithium-ion cell chemistry, improved engineering standards, and the adoption of more rigorous safety codes collectively underpinned these results. Failure rates for stationary systems now range between 0.04 percent and 0.14 percent annually, aligning with the approximately 0.1 percent failure rate typical for oil-filled electrical transformers.
The report underscores that the most pronounced improvement occurred between 2024 and 2025, with a 50 percent drop within that single year. These statistics reflect not just technology maturation but also changes in project development processes and operational protocols. The results place lithium-ion storage on par with other mature grid infrastructure from a reliability standpoint, an important market signal for utilities and developers evaluating project risks and insurance costs.
Impact of enhanced safety codes
The adoption of NFPA 855, the National Fire Protection Association’s standard for energy storage systems, marked a turning point in U.S. BESS project safety. EPRI observed that newer systems, those built under these updated codes, consistently outperform legacy installations in both reliability and incident severity. A widely cited incident in 2019 involving an Arizona Public Service facility predated the release of NFPA 855 and highlighted how earlier generations of BESS lacked key protections such as enhanced fire suppression and system isolation protocols.
Facilities commissioned since the implementation of NFPA 855 typically undergo comprehensive safety reviews during commissioning and operation. This has not only mitigated accident risks but has also contributed to the substantial reduction in failures in recent years. According to EPRI’s principal investigator, ongoing improvements and code compliance are critical as deployments accelerate in ISO and utility markets.
Risk profile for older storage assets
Notwithstanding industry progress, EPRI’s report points out that “early-vintage” storage systems remain disproportionately vulnerable. These assets often lack retrofits for more sophisticated monitoring and control or have not undergone thorough risk reassessments. While the vast majority, 93 percent, of documented BESS safety incidents globally since 2018 resulted in no injuries or fatalities, previous U.S. incidents demonstrate the potential consequences of underestimating legacy system risks.
Operators of older BESS sites are advised to conduct targeted retrofits and implement safety upgrades where feasible. Routine reviews of their asset portfolios against the standards embodied in NFPA 855 may further identify points of vulnerability, from fire suppression gaps to outdated battery management software. EPRI’s Lakshmi Srinivasan emphasized that the sector now benefits from knowledge and practices unavailable as recently as 2019, making ongoing assessment essential for older installations.
Implications for U.S. storage portfolios
For developers and asset managers, the steep reduction in failure rates alters the risk-reward profile of battery storage investments. Insurance underwriting, operational planning, and pricing models will likely reflect this shift, particularly for newly built BESS projects compliant with stricter safety codes. However, for portfolios containing substantial legacy assets, especially those in transmission-constrained ISO markets, planning for retrofits and incorporating additional operational safeguards remain prudent.
EPRI’s data will feed into ongoing technical guidelines used by both utilities and independent power producers as they size, site, and maintain new storage projects. The comparability of current BESS reliability to established legacy grid assets is likely to facilitate broader storage deployment in ISO and RTO capacity, regulation, and reserve markets. Yet, the critical message for U.S. operators is maintaining vigilance with earlier vintages and prioritizing asset-specific risk assessments aligned with the latest codes.
What this means for buyers
Battery storage systems in the United States are the affected asset class in this story. The 98 percent drop in global BESS failure rates since 2018 lowers operational risk for buyers considering new-build projects but flags the need for retrofits on older assets. Buyers should review portfolios for systems installed before NFPA 855 and consider upgrades or enhanced monitoring this quarter to align with best practices and ensure insurability.
Reporting via the original publisher
