Energy storage systems (ESSs) can increase power system stability and efficiency, and facilitate integration of intermittent renewable energy, but deployment of ESSs will remain limited until they achieve an attractive internal rate of return (IRR). Linear optimization is used to find the ESS power and energy capacities that maximize the IRR when used to arbitrage 2008 electricity prices (the highest of the past decade) in seven real-time markets in the United States for 14 different ESS technologies. Any reductions in capital costs needed to achieve an IRR of 10% are solved for. Results show that the profit-maximizing size (i.e. hours of energy storage) of an ESS is primarily determined by its technological characteristics (round-trip charge/discharge efficiency and self-discharge) and not market price volatility, which instead increases IRR. Most ESSs examined have an optimal size of 1–4h of energy storage, though for pumped hydro and compressed air systems this size is 7–8h. The latter ESSs already achieve IRRs >10%, but could be made even more profitable with minimal cost-reductions by reducing power capacity costs. The opposite holds for Flywheels, electrical ESSs (e.g., capacitors) and a number of chemical ESSs (e.g., lead acid batteries). These could be made more profitable with minimal cost-reductions by reducing energy capacity costs.