The US has set a new energy storage deployment record during the final quarter of last year as markets across all segments showed signs of growth.
The US energy storage sector deployed 186MW/364MWh of storage in Q4 to set a power capacity record last year, according to Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest ‘US Energy Storage Monitor’ report.
Front-of-the-meter (FTM) applications took the lion’s share of the market for the first time in three quarters as deployment jumped 160% to 104MW in Q4 2019— or 56% of all quarterly deployments, in MW terms.
On a MWh basis, the grid-scale storage sector grew by 44% quarter-over-quarter, with the implied reduction in average duration, due mainly to new projects in Pennsylvania, Jersey, Maryland (PJM) participating in Regulation D, with one-hour duration batteries.
Kelly Speakes-Backman, ESA CEO, said the record-breaking fourth quarter reaffirmed the industry’s tremendous growth.
She said: “The electricity system of today and tomorrow relies on energy storage expansion, inclusion and integration. To accelerate its resilience, reliability, and economic benefits, it is critical that federal lawmakers enact a standalone federal energy storage tax credit.”
While Massachusetts led the FTM rankings, the Public Safety Power Shutoffs (PSPS) in California from 9 October proved a significant driver of growth for the residential segment as the state topped the behind-the-meter (BTM) segment.
The non-residential BTM sector deployed 42.2MW in the final quarter of last year, its second-strongest quarter on record, while the residential market saw 40.4MW installed in the same time period.
Brett Simon, Wood Mackenzie Senior Analyst, said: “California continues to be a market to watch and we expect almost one-in-four residential solar systems across the state to have storage attached in 2020.
“This is due to multiple factors, including the Self-Generation Incentive Program, opportunities from time-of-use rates, continued desire for resilience in the wake of PSPS events and even some upside from the new-home solar mandate.
“Hawaii also will continue to see strong growth, with most residential solar installers already reporting pipelines where over 90% of their residential solar systems come equipped with storage.”
Wood Mackenzie and ESA forecast the US energy storage market will grow from annual deployment of 523MW ($712 million) last year to 7.3GW ($7.2 billion) in 2025.
This growth will be largely be driven by utility procurements.
The residential market segment, with its higher prices on a MWh basis, will represent a disproportionate share of the market’s dollar value by 2025 – 26% of revenue compared to only 16% of installed MWh. This will be primarily driven by favourable policies and resiliency concerns in California.