September 9, 2021
U.S. Storage Market Continues to Grow in Q2 2021
Deployments rise 162% year-on-year in the quarter
HOUSTON/WASHINGTON, D.C., 9 September 2021 – According to Wood Mackenzie, a Verisk business (Nasdaq: VSK), and the U.S. Energy Storage Association’s (ESA) latest US Energy Storage Monitor report, 345 megawatts (MW) of new energy storage systems were brought online in the second quarter of 2021.
This is an increase of 162% over the same quarter in 2020, making Q2 2021 the second-largest quarter on record by MW for U.S. energy storage additions. Market momentum continues to build, as an unprecedented volume of storage will come online in in the second half of the year, with Wood Mackenzie expecting that storage projects representing over US$5 billion of investment will come online in 2021 alone.
Despite positive market momentum in the US, the residential battery storage market dipped slightly, the first drop for the segment in nine quarters (since Q4 2018). Equipment constraints, including an ongoing Tesla Powerwall shortage, is hampering the segment’s growth despite the proliferation of new residential storage players.
The non-residential segment, which consists of onsite storage and community-scale storage, saw quarter-on-quarter deployments rise by 31%, driven by the growth of the community storage market in Massachusetts.
On the rise: Quarterly growth in the U.S. storage market
The front-of-the-meter (FTM) market deployed 218 MW/729 MWh in Q2 2021, with California, Texas and Arizona leading the segment. California continued to lead the front-of-the-meter segment in Q2, with Arevon/Capital Dynamics’s 100MW/400MWh Saticoy Energy Storage peaker plant replacement in Ventura County contributing most of the MW for the quarter. Solar-plus-storage projects in Texas and Arizona also bolstered Q2 front-of-the meter capacity.
“The United States remains on course for a record setting year, further demonstrating battery storage’s growing acceptance within the power market and underlining its importance to the energy transition,” said Vanessa Witte, senior energy storage analyst with Wood Mackenzie.
“Energy storage deployment achieves decarbonization and resilience goals simultaneously,” said Jason Burwen, U.S. Energy Storage Association Interim CEO.
“Storage is increasingly necessary to enable the accelerated commissioning of wind and solar power—with the U.S. Department of Energy’s just-released Solar Futures Study projecting as much as 400 GW needed by 2035.
“Storage also assures that power delivery remains resilient to increasingly frequent and intensive weather disruptions, like the heat waves and hurricanes seen in the U.S. this past summer.
“While the market for energy storage in the U.S. has seen tremendous growth this year, public policy has yet to support the pace of deployment needed to meet decarbonization and resilience goals. An investment tax credit, which catapulted industries like solar and wind, can do the same for the energy storage industry—with the added benefit of steering more supply chain investment decisions onshore.”
Policy support continued to build in the second quarter, with several new state incentives introduced for residential and non-residential storage. The industry also still awaits the outcome of budget reconciliation, expected this winter, which could include a solar investment tac credit (ITC) extension and/or standalone storage ITC. A positive outcome would upgrade the energy forecast across all segments.
About the U.S. Energy Storage Monitor:
Delivered quarterly, the U.S. Energy Storage Monitor is the industry’s only comprehensive research on energy storage markets, deployments, policies and financing in the U.S. These in-depth reports provide energy industry professionals, policymakers, government agencies and financiers with consistent, actionable insight into the burgeoning U.S. energy storage market. https://www.woodmac.com/research/products/power-and-renewables/us-energy-storage-monitor/
We report energy storage capacity data in three segments: residential, non-residential and front-of-the-meter. Projects that are deployed on the end-customer side of the meter (i.e. behind-the-meter) are reported as falling in either the residential or non-residential segment. The non-residential segment includes commercial, industrial, education, military, and non-profit deployments, but excludes uninterruptible power supply. Community solar-plus-storage projects are deemed “non-residential” to align with the Wood Mackenzie solar team’s methodology. Regardless of their size, projects that are deployed on the utility side of the meter (i.e. in front of the meter) are reported in the front-of-the-meter segment, with the exception of community solar-plus-storage. In some cases, we differentiate these as either “distribution domain” or “transmission domain” to clarify the point of interconnection.
About Wood Mackenzie:
Wood Mackenzie, a Verisk Analytics business, is a trusted source of commercial intelligence for the world’s natural resources sector. We empower clients to make better strategic decisions, providing objective analysis and advice on assets, companies and markets. For more information, visit: www.woodmac.com or follow us on Twitter @WoodMackenzie
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Verisk (Nasdaq:VRSK) provides predictive analytics and decision support solutions to customers in the insurance, energy and specialized markets, and financial services industries. More than 70 percent of the FORTUNE 100 relies on the company’s advanced technologies to manage risks, make better decisions and improve operating efficiency. The company’s analytic solutions address insurance underwriting and claims, fraud, regulatory compliance, natural resources, catastrophes, economic forecasting, geopolitical risks, as well as environmental, social and governance (ESG) matters. Celebrating its 50th anniversary, the company continues to make the world better, safer and stronger, and fosters an inclusive and diverse culture where all team members feel they belong. With more than 100 offices in nearly 35 countries, Verisk consistently earns certification by Great Place to Work. For more: Verisk.com, LinkedIn, Twitter, Facebook and YouTube.
About The U.S. Energy Storage Association:
The U.S. Energy Storage Association (ESA) is the national trade association dedicated to energy storage, working toward a more resilient, efficient, sustainable, and affordable electricity grid – as is uniquely enabled by energy storage. With more than 200 members, ESA represents a diverse group of companies, including independent power producers, electric utilities, energy service companies, financiers, insurers, law firms, installers, manufacturers, component suppliers and integrators involved in deploying energy storage systems around the globe. More information is available at: www.energystorage.org.
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