March 10, 2020

US storage market sets power capacity record with Q4 2019 deployments

Sector to see strong growth through 2025

HOUSTON/WASHINGTON D.C., March 10, 2020 – The United States energy storage sector set a power capacity record in Q4 2019, deploying 186.4 megawatts (MW) and 364.2 megawatt-hours (MWH) of storage.

According to Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest ‘US Energy Storage Monitor’ report, Q4 2019 marks the largest-ever quarter for storage deployments across all US market segments.

The front-of-the-meter (FTM) market spiked 160% in quarter-over-quarter growth, with 103.8 MW deployed in Q4 2019. The FTM market accounted for 56% of quarterly deployments, in MW terms, after two consecutive quarters in which it made up less than 50%.

On a MWh basis, the FTM storage sector grew by 44% quarter-over-quarter, with the implied reduction in average duration, due mainly to new projects in PJM participating in Reg D with 1-hour duration batteries. 

“2019 was a remarkable year for energy storage and the record-breaking fourth quarter numbers reaffirm the industry’s tremendous growth,” said Kelly Speakes-Backman, ESA CEO. “The electricity system of today and tomorrow relies on energy storage expansion, inclusion and integration. To accelerate its resilience, reliability, and economic benefits, it is critical that federal lawmakers enact a standalone federal energy storage tax credit.”

While Massachusetts led the FTM rankings, California ruled the behind-the-meter (BTM) segment. The Public Safety Power Shutoffs (PSPS) in California during were a significant driver of growth for the residential segment and create upside going into 2020.

The non-residential BTM sector recorded its second-strongest quarter on record, with 42.2 MW deployed. The residential market saw another breakthrough quarter, with 40.4 MW installed in Q4 2019.

“The BTM segment had a banner year,” said Brett Simon, Wood Mackenzie Senior Analyst. “California continues to be a market to watch and we expect almost one in four residential solar systems across the state to have storage attached in 2020. This is due to multiple factors, including the Self-Generation Incentive Program, opportunities from time-of-use rates, continued desire for resilience in the wake of PSPS events and even some upside from the new home solar mandate. Hawaii also will continue to see strong growth, with most residential solar installers already reporting pipelines where over 90% of their residential solar systems come equipped with storage.”

With a ground-breaking Q4 2019, Wood Mackenzie and ESA forecast the US energy storage market to grow significantly over the next six years. 

The market is expected to expand from an annual deployment of 523 MW in 2019 to 7.3 GW in 2025. Additionally, the market’s total size will surge from $712 million in 2019 to $4.2 billion in 2021 and reach $7.2 billion by 2025. This growth will be largely be driven by utility procurements.

The residential market segment, with its higher prices on a MWh basis, will represent a disproportionate share of the market’s dollar value by 2025 – 26% of revenue compared to only 16% of installed MWh. This will be primarily driven by favourable policies and resiliency concerns in California.


Key findings from the report:

  • 186.4 MW of energy storage was deployed in the United States in Q4 2019, rising 33% YOY
  • 364.2 MWh of storage was brought online in the United States in Q4 2019, rising 60% QOQ
  • In Q4 2019, FTM storage deployments rose 160% QOQ (MW terms)
  • In Q4 2019, the non-residential space had its second-strongest quarter ever with 42.2 MW deployed
  • In Q4 2019, the residential market had another record quarter with 40.4 MW installed
  • The US energy storage market is set to grow from 523 MW in 2019 to 7.3 GW in 2025

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. www.energystoragemonitor.com

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

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 190 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.

For further information, please contact:

Global
Laura Hindley
+44 203 060 8742
Laura.hindley@woodmac.com


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