Utilities are increasingly using large battery systems to store electricity, helping meet peak demand, support renewable energy and hold down prices. Those benefits have prompted states across the country to offer incentives for more battery storage. But the expansion has also run into resistance. A new wave of battery facilities are being built in or near densely populated areas, where some residents and local officials worry about the risk of fires.

There’s now a push to place smaller battery systems, typically up to 5 megawatts, in urban and suburban areas. That’s enough to power thousands of homes, but they usually need less than a quarter of an acre of space, with the batteries enclosed in steel-walled containers. Smaller projects can get up and running faster than bigger sites, developers say.

The batteries are appearing across the country. There were nearly 370 battery sites of 5 megawatts or less in the U.S. as of July, more than triple the number in 2020, according to data provided to The Wall Street Journal by the U.S. Energy Information Administration. Local governments had at least 111 active moratoriums or bans on battery-storage sites as of August, up from 76 in January, according to battery-storage development company Carina Energy.

The main source of concern is fear of toxic fires. New York state, where there have been five fires at battery sites since 2023, accounts for 74% of current moratoriums, according to Carina Energy. As an example of what people fear, hundreds of residents in Monterey County, Calif., were evacuated early last year after a fire broke out at the Moss Landing Power Plant, a battery storage site.