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Report: US Energy Storage Industry Had its Strongest Third Quarter on Record

(Credit: Pixabay)

The United States energy storage sector had it strongest third quarter on record this year, deploying 100.7 MW and 264.6 MWh of storage, according to a new report from Wood Mackenzie.

The front-of-meter (FTM) market rebounded after its slump with 161 MW deployed, and the residential storage market kept up recent momentum, slightly outpacing second quarter deployment levels to deliver a new record for quarterly residential deployments.

The report says Massachusetts was the quarter’s clear leader for FTM storage deployments at 58 MWh deployed. Vermont and Arkansas tied for second place at 24 megawatt-hours of FTM storage each. The US front-of-the-meter segment saw 121% quarter over quarter growth in the third quarter and is on track to grow by nearly 10% year-over-year in MW-terms in 2019, the report notes.

FTM storage growth will accelerate significantly starting in 2020 as the segment adds 825 MW next year and 2,635 MW the following year.

“We are encouraged to see the continued strong growth of the energy storage industry,” said Kelly Speakes-Backman, CEO of the US Energy Storage Association. “Three of the last four quarters have recorded more than 100 MW in deployments, experiencing a healthy diversity of customer-sited and grid-side projects, and a growing pipeline of projects in development. We can expect deployments to accelerate even further if Congress acts to pass legislation making stand-alone energy storage eligible for the 30% investment tax credit by the end of this year.”

Residential storage grew by nearly 40 MW in the third quarter of the year. California, Hawaii and Arizona were the largest US markets for residential storage in during the timeframe.

Wood Mackenzie says the power shutoffs over the past few months in California will act as significant drivers of growth in residential storage into 2020 and beyond as more customers explore solar-plus-storage for backup power.

As the storage industry grows, key standards and safety protocols are emerging that will help maintain market opportunities for storage going forward. The third quarter saw notable activity in this area, including the release of a finalized version of NFPA 855 in September and a new storage permitting standards in New York. The emerging standards cover issues such as permitting, site planning, equipment and thermal runaway.

The US energy storage market is expected to grow by over 12x in MW-terms between 2019 and 2024. This outlook was upgraded versus the second quarter as a result of significant activity in the FTM segment, including several new large-scale project and procurement announcements, as well as significant upside due to massive short-term capacity additions planned in Southern California.

The report notes that approximately 23x growth is expected in the FTM segment between 2019 and 2024, while a steady rise in residential deployments will build on a strong 2019, according to Wood Mackenzie.

The non-residential market forecast through 2024 includes significant uncertainty, with potential downsides pertaining to business-model challenges and market disturbances such as from cluster studies holding up projects in Massachusetts.

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