The U.S. Department of Energy’s Office of Electricity has launched a new prize competition aimed at a persistent problem that has kept promising energy storage technologies off the grid for decades: the gap between a working laboratory prototype and a product that can actually be manufactured at scale.
What the STEP Prize is and who can enter
The U.S. Department of Energy’s Office of Electricity launched the Storage Design Strategies to Ease Production (STEP) Prize, a new competition to help the next generation of energy storage technologies move more smoothly from concept to real-world manufacturing. The prize was announced on July 7, 2026.
The Storage Design Strategies to Ease Production (STEP) Prize is a $500,000 two-phase competition explicitly designed to identify and foster innovative solutions for novel energy storage technologies. The prize targets a broad spectrum of innovators, including individuals, academic institutions, nonfederal government entities, small businesses, start-ups, entrepreneurs, and other inventors working on nascent or emerging energy storage innovations.
The Storage Design STEP Prize recognizes innovators who are working on novel energy storage technologies and encourages them to build production readiness into their designs from the start.
The manufacturing gap the prize targets
The Storage Design STEP Prize directly addresses historical challenges experienced by energy technologies during rapid scaling and market penetration, particularly those stemming from insufficient early-stage focus on manufacturability and supply chain resilience.
The prize will guide innovators to integrate manufacturability and supply chain resilience principles early in the technology development process, with the aim of producing more affordable and secure next-generation energy storage technologies for the grid.
The DOE has noted that a promising technology alone is not enough. For new storage solutions to meaningfully contribute to a resilient and reliable grid, they must be manufacturable, cost-effective, and supported by supply chains that are diverse and robust.
The U.S. energy storage market installed a record 3.3 gigawatts (GW)/8.4 gigawatt-hours (GWh) of battery energy storage systems in Q1 2026, surpassing the previous Q1 record by 54%, with utility, commercial, and residential installations all hitting new highs, according to the latest U.S. Energy Storage Monitor report released by the American Clean Power Association (ACP) and Wood Mackenzie.
One key factor behind the U.S. battery boom is the preservation of the federal investment tax credit for qualifying energy storage systems, according to Wood Mackenzie and ACP. The Inflation Reduction Act first authorized those credits, which can offset 30% or more of deployment costs, in 2022.
Supply chain resilience as a design principle
The STEP Prize reflects a shift in how federal energy officials are thinking about storage development. Rather than funding hardware demonstrations after a technology is already designed, the competition pushes competitors to treat supply chain resilience as a design constraint from day one, not an afterthought once laboratory results are in hand.
The STEP Prize is aimed at the next layer of the challenge: ensuring that novel chemistries and form factors, beyond proven lithium-ion systems, can follow the same path to the factory floor. The rapid build-out underway across the country has been covered extensively, including in America’s record first-quarter battery additions earlier this year.
Since the American-Made Challenges program launched in 2018, DOE has launched more than 80 prizes and offered over $400 million in cash prizes and support, spanning solar, water, geothermal, buildings, hydrogen, energy storage, transportation, technology transitions, manufacturing, and more.
The STEP Prize adds a manufacturing-focused chapter to that portfolio at a moment when the U.S. grid increasingly depends on storage to back up variable solar and wind generation. Policymakers watching electricity costs climb for households have pointed to cheaper, domestically produced storage as a long-term lever on bills.
Next steps for applicants
Phase 1 of the Storage Design STEP Prize closes on October 8, 2026. The competition runs in two phases, with the first phase open to the broad innovator categories listed in the prize rules. Competitors are expected to demonstrate not only a viable energy storage concept but also a credible pathway through the manufacturing and supply chain obstacles that have historically prevented new storage technologies from reaching commercial scale.
Full competition details, including submission deadlines and judging criteria, are posted on the official DOE Office of Electricity announcement and the HeroX prize platform.
The $500,000 prize pool is modest relative to the capital flows now moving through the storage sector, but federal prize competitions have historically served as proof-of-concept launchers that attract private follow-on investment well beyond the headline award figure.
