Energy storage market hits new record in fourth quarter
The U.S. energy storage market posted a new record for new system installations in the fourth quarter of 2021.
Roughly 4,727 megawatt hours (MWh) of energy storage systems were installed in the most recent quarter, which was not only a record but more than the first three quarters combined, according to Wood Mackenzie and the American Clean Power Association’s (ACP) latest U.S. Energy Storage Monitor report.
In terms of annual deployments of grid-scale storage, installations nearly tripled to 3 gigawatts (GW)/9.2 gigawatt hours (GWh) compared to the previous year. However, despite a record year, the grid-scale market didn’t meet expectations in 2021, with supply chain challenges delaying more than 2 GW of capacity into 2022 and 2023.
Wood Mackenzie, a Verisk business, forecasts that supply chain pressures and delays within interconnection queue processing will persist through 2024.
“2021 was yet another record for the U.S. energy storage market, with annual installations of multiple gigawatts for the first time. Even in the face of continued macro-economic headwinds, interconnection delays, and lack of proactive federal policy, increasing demand for resilient clean energy and volatility in the price of fuel-based generation will drive energy storage deployment forward,” Jason Burwen, vice president for energy storage at American Clean Power, said. “Despite supply tightness leading to some project delays, the grid-scale market is still on track for exponential growth.”
Roughly 123 MW of residential storage was installed in Q$, the most in a quarter to date, beating the previous quarterly record of 110 MW in the first quarter of 2021. By 2026, annual installations in the residential segment are expected to hit 2 GW/5.4 GWh, with California, Puerto Rico, Texas, and Florida leading the way. By 2027, California will remain the largest residential storage market.
“Puerto Rico’s position in the residential U.S. solar-plus-storage market comes as no surprise and demonstrates how outages can drive battery adoption, with thousands of new residential installs emerging each quarter and competition increasing between local installers,” Chloe Holden, an analyst with Wood Mackenzie’s energy storage team, said. “Outages in Puerto Rico are also driving customers to recognize the added value of resilience that solar-plus-storage systems offer, despite premium pricing and lack of incentive programs. This is also driving solar-plus-storage market growth in Florida, the Carolinas, and parts of the Midwest.”
The non-residential storage segment delivered 131 MWh in the fourth quarter resulting in 162MW/350MWh of total annual deployments in 2021. Demand was driven by increased storage attachment rates in New York and Massachusetts.
