Grid-Scale Deployments Drive Growth in Energy Storage
Installations of grid-scale energy storage across the U.S. continue to surge, with three states—California, Arizona, and Texas—responsible for 85% of that growth in the second quarter of this year.
Data from the American Clean Power Association (ACP) and Wood Mackenzie, released October 1 in the group’s latest Energy Storage Monitor report, showed 3,011 MW and 10,492 MWh of energy storage was deployed in the April-through-June period. The report said every market segment for storage grew year-over-year, with grid-scale storage deployments at 2,773 MW and 9,982 MWh. Residential storage, showing an uptick as the need for home charging of electric vehicles and backup power grows, jumped 12% to 423 MWh. Installations of community, commercial and industrial (CCI) storage were up 61% from the second quarter of 2023, to 87 MWh.
“Energy storage is becoming a mainstay of the power grid, delivering a more resilient and affordable grid,” said John Hensley, SVP of Markets and Policy Analysis for ACP. “Additional storage capacity across U.S. markets is helping to provide a cost-effective and reliable solution to serious problems such as rising energy demand, a timely need for more overall capacity, and more volatile and extreme weather events. To keep the trend going, it’s important to find solutions for development challenges such as lengthy interconnection queues and permitting and siting.”
“This quarter showed massive growth compared to year-ago levels and the grid-scale segment continues to be the main driver,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “Community performed strongly as well. And while residential did expand, it was still a somewhat slow quarter as California’s meteoric growth faltered, combined with low installations in Hawaii and Puerto Rico, which continue to be affected by incentive changes.”
Growth Should Continue
Wood Mackenzie’s five-year outlook for the U.S. energy storage market shows total U.S. storage deployments will grow 42% this year compared to 2023 levels, but capacity additions will level out. The group said deployments will have an average annual growth rate of 7.6% between 2025 and 2028. Across all segments, the energy storage industry is expected to deploy 12.8 GW/ 36.9 GWh this year.
The grid-scale segment is projected to increase 32% year-over-year with 11 GW/32.7 GWh deployed by year-end, and 62 GW cumulatively from 2024-2028, according to the report. The report also said that 12 GW of distributed storage capacity will be installed over the next five years, with the residential segment accounting for 10 GW of those deployments, or more than 80%, between this year and 2028.
The CCI segment is forecast to install 2.5 GW of storage between 2024 and 2028, a slight reduction from previous forecasts.
“Growth flattens in 2025 and 2026 as project capacity is pushed into later years of the forecast largely due to early-stage development challenges,” said Witte. “The CCI segment continues to experience high barriers to growth including the complexity of developing these projects and the limited availability of financial value streams.”
—Darrell Proctor is senior editor for POWER (@POWERmagazine).