Corporate Investments in Energy Storage Reach $660 Million in Q3 2016

According to the latest edition of GTM Research and ESA’s U.S. Energy Storage Monitor, corporate investment in energy storage reached an all-time high in terms of quarterly investments in Q3. Disclosed venture funding and project finance totaled $660 million in the third quarter of the year, bringing the annual total to $812 million.

Source: GTM Research / ESA U.S. Energy Storage Monitor

The largest announced deal during the quarter was $300 million in project financing from the Electric Gas & Industries Association for Tabuchi Electric. The report notes that Advanced Microgrid Solutions also closed a large project financing deal worth $200 million with Macquarie.
 
“Financing activities in this most recent quarter are noteworthy not just because of the scale, but also because project financing made up a significant portion of the total,” said Ravi Manghani, GTM Research’s director of energy storage. “While one quarter alone doesn’t constitute a trend, growth in project financing, especially in the residential segment, is a harbinger for further strengthening of deployment business models.”
 
Compared to corporate investment, deployments for the quarter were relatively quiet, however, as no front-of-meter projects above 1 megawatt were brought on-line. Across all segments, the U.S. saw 16.4 megawatts of energy storage deployed in the third quarter of 2016.
 
The behind-the-meter segment, which is made up of residential and commercial deployments, accounted for the majority of the quarter’s storage deployments. The U.S. deployed 14.1 megawatts of behind-the-meter storage in the third quarter of the year, which is essentially flat year-over-year.
 
Despite the low deployment total for the quarter, GTM Research expects a strong finish for 2016, as several front-of-meter projects are slated to come on-line in December. According to the report, the U.S. annual energy storage market will grow to 260 megawatts in 2016, up from 226 megawatts in 2015. 
 
Source: GTM Research / ESA U.S. Energy Storage Monitor
 
“In 2016 we are seeing a critical trend in energy storage deployment -- a wider range of competitive applications is becoming available to storage systems, and as a result demand for longer-duration systems is increasing,” said Matt Roberts, executive director of the Energy Storage Association. “Measured in megawatt-hours, the industry is projected to grow by more than 284 percent by the end of the year, reflecting a broader set of applications, an increase in distributed storage systems, and a larger role in grid reliability like the Aliso Canyon procurements.”
 
Key findings from the Q4 2016 U.S. Energy Storage Monitor
  • Corporate investments in energy storage totaled $660 million in Q3 2016
  •  U.S. deployed 16.4 megawatts of energy storage in Q3 2016
  •  Behind-the-meter deployments accounted for 86 percent of total megawatts deployed in Q3 2016
  •  Lithium-ion batteries dominated the energy storage market for the eighth straight quarter, representing 96.2 percent of the market in Q3 2016
  • Total closed the company’s acquisition of Saft in July 2016
  • Measured in megawatt-hours, the industry is projected to grow by more than 284 percent by the end of 2016
  • SCE and SDG&E have contracted 84.5 megawatts of energy storage as part of Aliso Canyon procurement
For more information, download the free executive summary here.