Energy storage is continuing to grow by leaps and bounds, according to the latest U.S. Energy Storage Monitor, a joint report from Wood Mackenzie, Annapolis, Md., and the U.S. Energy Storage Association, Washington, D.C.
Yet another record for the U.S. energy storage market was set in the fourth quarter of last year: 2,156 megawatt-hours (MWh) of new energy storage systems were brought online, a 182% increase from the third quarter. Four out of every five megawatts (MW) deployed in the fourth quarter were for front-of-the-meter storage, which is “taking off” in the United States as prices fall and “barriers to storage deployment are eroded,” according to the report.
For all of 2020, 1,464 MW/3,487 MWh of new storage came online in the United States, a 179% increase over 2019 in terms of megawatts, according to the report.
“This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years,” Dan Finn-Foley, Wood Mackenzie’s head of energy storage, said in a press release announcing the release of the report.
“The new largest battery in the world, the 300 MW/1,200 MWh system newly installed at Moss Landing, likely won’t hold the title for long,” Finn-Foley said.
Indeed, the U.S. storage market will add five times more megawatts of storage in 2025 than was added in 2020, with front-of-the-meter storage continuing to contribute between 75% to 85% of new megawatts each year.
“2020 is the first year that advanced energy storage deployments surpassed gigawatt scale—a tremendous milestone on the path to our aspiration of 100 gigawatts by 2030,” said Jason Burwen, the U.S. Energy Storage Association’s interim CEO. “With continuing storage cost declines and growing policy support and regulatory reform in states and the federal government, energy storage is on an accelerating trajectory to enable a resilient, decarbonized, and affordable electric grid for all.”
Ashley Wald, a partner with the law firm Holland & Hart in Denver, told Utility Dive in December that the change in administrations at the federal level could especially propel the energy storage sector.
“Where the industry has been thriving over the last several years, now it really can take off in a way it couldn’t have before, because it will have the administrative support,” Wald said.
Other key findings in the report include:
- The nonresidential segment of the U.S. energy storage market is growing more slowly than the other two segments, deploying 76.5 MWh during the fourth quarter of 2020. Massachusetts led the nonresidential segment during this quarter, with new projects also coming online in California and Hawaii.
- The fourth quarter was “the most eye-catching quarter” to date for the residential market. At 90.1 MW deployed, residential storage projects made up 14% of the megawatt total for the quarter. After gradual growth in deployments over the first three quarters of 2020, there was a notable residential spike in the fourth quarter, driven in large part by homeowner interest in California.
- California contributed the most residential storage deployments in 2020. Hawaii was also a very active market, while states in the Northeast, the Midwest, the Mid-Atlantic and the Southeast are forecast to see growth over the next few years.
“Battery backup is already becoming somewhat of a contested concept in the industry, as it can have different meanings depending on the installer or vendor,” said Chloe Holden, energy storage analyst with Wood Mackenzie. “But the ability of solar-plus-storage to provide backup is increasingly driving sales even in markets without additional incentives, particularly states that suffer from regular power outages. We expect an uptick in home battery sales in Texas in the aftermath of February’s devastating o