As I am mentioned… First and foremost, the grid must be able to take back energy in order for regenerative braking to work, essentially meaning that there is another consumer within the same section. With AC networks, this is easier to accomplish, because a section is bigger.

It is also (relatively spoken) more complicated to create a DC-based regenerative braking system (I don't have proof for that, just from what I have seen).

In the Zürich light rail system, regenerative braking became available only with the third series of Tram 2000, 3-phase drives, built 1991 to 1993. Nowadays, besides those units, the Cobras as well as the whole trolleybus fleet have regenerative braking. As Zürich is quite hilly, this leads to considerable energy savings (some 10 to 15%). As the schedules are dense enough, there is always a consumer around (I say that because I am not aware of any specific measures taken at the substations).

There have, however, been developments with energy storage units (supercapacitors, flywheels) in the substations, and from what I read, they were promising, and I believe to remember reading that they did get beyond the prototype stage.