US Energy Storage Market Grows 232% In First Quarter

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The United States deployed a total of 148.8 megawatts (MW) of energy storage in the first quarter of 2019, breaking the previous megawatt-record set in the preceding fourth quarter by 6% and growing 232% over the amount deployed in the first quarter of 2018.

Image Credit: GE Renewable Energy

Further, the US non-residential storage market had its strongest quarter ever in the first quarter, according to the latest US Energy Storage Monitor published this week by Wood Mackenzie Power & Renewables and the US Energy Storage Association (ESA).

Overall, 271.1 megawatt-hours of storage was brought online in the first quarter, a 110% rise year-over-year.

“These first-quarter numbers indicate that 2019 will be a banner year for energy storage in the United States,” said ESA CEO Kelly Speakes-Backman. “It’s become clear that states are already unlocking the potential of storage by passing legislation and creating regulatory frameworks to encourage energy storage deployment. The industry is responding by developing storage projects and creating jobs in their states.”

California again led the US storage market in the first quarter of 2019, with Arizona, New Jersey, and New York posting strong quarterly growth. California led in both the residential and non-residential sectors, while New Jersey led front-of-the-meter. Looking forward, the report highlights state-level regulatory activity such as the Value of Distributed Energy Resources (VDER) proceeding in New York state and the Solar Massachusetts Renewable Target (SMART) Program in Massachusetts as continuing to spur pipeline buildout and “substantial growth” in the next few years.

“Based on activity this quarter, we’re keeping an eye on New York state,” said Wood Mackenzie Power & Renewables senior energy storage analyst Brett Simon. “When the New York bridge incentive opened at the end of April 2019, the first block of the retail incentive was fully subscribed in a little over a week, showing how much pent up storage demand there was in New York. New York also updated its VDER program to guarantee greater certainty for compensation under the program’s value stack, which is a boon for energy storage projects in the state.”

Behind-the-meter energy storage deployments accounted for 46% of all first-quarter deployments in terms of megawatts-deployed — an increase of 36% over the previous quarter and 138% year-over-year — and 60% of all deployments in terms of megawatt-hours-deployed. However, the market dropped 23% on the fourth quarter of 2018 in terms of megawatt-hours-deployed, after a rush of front-of-the-meter projects were completed at the end of 2018.

Wood Mackenzie and the ESA expect US energy storage annual deployments to reach over 4.3 gigawatts (GW) by 2024 with utility procurements, changing tariffs, and grid service opportunities serving to drive the market forward. In 2019, energy storage deployed is expected to double compared to the previous year, and a major increase will follow in 2020 as several large front-of-the-meter projects come online, leading 300% growth over 2019.

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Joshua S Hill

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