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It seems like yesterday that Ron Corio told me at a lunch with engineers that energy storage will be the next big thing since solar power. It was years ago. Well, development happened quickly, time went by, and now it’s here to stay. Residential energy storage installations just hit an all-time high, and US grid-scale energy storage is coming on fierce.
With a record-breaking 346 MW of residential storage built in Q3 2024 — a 63% increase over the previous quarter — the residential energy storage market has reached an all-time high. Despite constraints in domestic battery supplies, California, Arizona, and North Carolina led the way in growth, installing 56%, 73%, and 100% more household storage energy in Q3 than in Q2. Looking back more broadly, the residential market set a new all-time quarterly record.
The grid-scale segment of the U.S. energy storage industry achieved a new Q3 record as well, with 3,431 megawatts (MW) and 9,188 megawatt-hours (MWh) deployed as the market continued its robust expansion. A total of 3,806 MW and 9,931 MWh were deployed, an 80% and 58% increase over data from the previous year, according to the most recent U.S. Energy Storage Monitor report from the American Clean Power Association (ACP) and Wood Mackenzie, which was issued today.
“We are seeing the energy storage industry fill a real need across the country to provide reliability in an affordable and efficient manner for communities,” said John Hensley, SVP, Markets and Policy Analysis for ACP. “With 64 GW of new energy storage expected in the next four years, the market signal continues to be clear that energy storage is a critical component of the grid moving forward.”
The markets for energy storage in Texas and California are showing no signs of slowing down
In Q3, both states’ grid-scale energy storage deployments were strong, demonstrating their continued adoption of storage as a grid solution. Thanks to its emphasis on longer-duration plants, California delivered the most GWh of new installations, with nearly 6 GWh added, and Texas tripled installations from the previous quarter, with nearly 1.7 GWh added. Installations in Arizona, Colorado, Florida, and Vermont also occurred in Q3, indicating a national desire for grid-scale storage deployment.
“The rapid energy storage deployment we’re seeing in the United States not only enhances reliability and affordability but also drives economic expansion. This additional storage capacity is helping meet increasing energy demand and is supporting growing industries like manufacturing and data centers,” said Noah Roberts, ACP’s VP of Energy Storage. “Energy storage is crucial for energy security and to help outpace rising demand.”
Residential and grid-scale industries will drive future growth
With grid-scale installations expected to more than double by 2028, and thus reach a cumulative power capacity of 63.7 GW, and household installations reaching 10 GW during the same time period, the grid-scale and residential segments will continue to dominate the market. With 29 MW installed, community-scale, commercial, and industrial (CCI) numbers stayed stable and decreased by just 4% from the previous year.
“We have seen consistent growth in the market this year, especially in the grid-scale segment,” said Nina Rangel, senior research analyst at Wood Mackenzie. “Overall, storage installations will grow 30% in 2024, signaling the industry’s strongest year yet. However, it will be difficult to keep this pace. Between 2025 and 2028 we are projecting an annual average growth rate of 10%, as early-stage development constraints continue.”
Although steady growth is anticipated, Allison Weis, global head of storage at Wood Mackenzie, pointed out that there are some unknowns surrounding the incoming presidential administration because protectionist policies like higher tariffs and modifications to certain tax credits may be implemented.
“While there might be potential opportunities in a new pricing environment for domestic manufacturers in terms of competition, any major shifts in tax incentives or increased tariffs could outweigh benefits and have an impact on new project development,” said Allison Weis, global head of storage for Wood Mackenzie.
Source: The American Clean Power Association (ACP), US Energy Storage Monitor
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