The US Inflation Reduction Act (IRA) has initiated a strong momentum in the renewable energy sector. According to a new report, “Energising American Battery Storage Manufacturing”, from SEIA (Solar Energy Industries Association) the IRA is strengthening the competitiveness of American energy storage manufacturing, but domestic production is still expected to fall short of demand as early as 2025 without strategic action.
“America’s ability to lead the global clean energy transition and boost grid reliability depends on how quickly we scale domestic production and deploy battery storage technology,” said SEIA president and CEO Abigail Ross Hopper.
The report defines the challenges, and the opportunities domestic storage companies will face during the transition process from a fossil fuel-based economy to a sustainable energy supply model, where solar power plays an important role. The US demand for battery energy storage systems (BESS) is likely to increase over six-fold from 18GWh to 119GWh by 2030, according to the report. US manufacturing capacity for all lithium-ion battery applications is currently at 60GWh.
The research also found the biggest barrier to spurring energy storage manufacturing is the cost and availability of raw materials. While phosphorus and lithium from the United States and its trading partners are available in sufficient quantities, the availability of graphite and other processed materials, like cathode and anode active materials, could experience a shortfall. For energy storage, the IRA offers incentives to produce electrode active materials, battery cells, and battery modules.
“Effective state regulations and industrial policies, e.g. incentive packages can provide early-stage support for mining and refining of materials to ensure manufacturers can meet demand. Smart and strategic investments across the supply chain are needed because building a domestic energy storage base is a strategic imperative for U.S. energy security,” Ms Hopper continued.