U.S. Energy Storage Market Achieves Record Growth

Battery energy storage.
Published On
Oct 21, 2022

As an important strategy in the pursuit of clean energy, storage capacity in the United States is on the rise. According to a recent study, the industry is experiencing record growth.

Released in September 2022 by market research firm Wood Mackenzie, in conjunction with the American Clean Power Association, the U.S. Energy Storage Monitor quantifies energy storage capacity across the country including planned, deployed and interconnected projects. The industry is broken down into four segments: residential, community-scale, commercial and industrial and grid-scale storage.

Some segments have done better than others. According to the report, grid-scale and residential storage were the real stars for the industry, breaking quarterly records for growth and boosting the industry overall.

In the second quarter, the U.S. grid-scale energy storage segment installed 1,170 megawatts (MW) of power capacity and 2,608 megawatt-hours (MWh) of capacity. Those are 212% and 137% increases, respectively, from the same quarter last year, and according to the report, represent the largest ever installed capacity for the segment in any second quarter.

The residential segment also experienced record growth. According to the report, it installed 154 MW and 375 MWh. Those are 67% and 36% increases, respectively, and a quarterly record. The megawatt-hours capacity bested the previous quarterly record of 334.1 MWh set in the first quarter of this year. The report notes that demand is rising for residential storage and that it was the first time ever that the segment installed more than 150 MW in a quarter.

On the downside, community, commercial and industrial storage deployments continue to “underwhelm” compared to the other market segments, according to the report. Combined, they represented only 26.3 MW and 59.4 MWh of storage in the quarter, which represent a 24% and a 1% decline, respectively, from the same quarter last year, and making Q2 2022 one of the least active quarters in recent memory for the segment. Less megawatt capacity was installed than in any quarter since 2019.

Several factors are contributing to this trend. For example, a series of deployments in Texas aided growth in the grid-scale segment specifically. According to Wood Makenzie, the state contributed 60% of installed capacity in that segment during the quarter.

The report’s authors are also bullish about key components of the recently passed federal Inflation Reduction Act. In particular, extension of the solar investment tax credit and passage of a similar provision for storage technology will aide all segments of the industry.

Wood Makenzie forecasts continued growth in the industry, with 59.2 gigawatts of energy storage capacity added through the year 2026.

About the Author

Rick Laezman

Freelance Writer

Rick Laezman is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at richardlaezman@msn.com.

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