U.S. energy storage market brought record 2,608 MW hours of grid-scale deployments in Q2

In the second quarter of 2022, the U.S. energy storage market hit a new capacity record, deploying 2,608 MW hours of grid-scale installations and 375 MW hours of residential storage, according to the latest U.S. Energy Storage Monitor report from Wood Mackenzie and the American Clean Power Association (ACP).

Most new entries came from Texas, contributing 60 percent of the quarter’s installations. Such efforts were buoyed by the passage of the solar investment tax credit (ITC) extension and a standalone storage ITC by Congress as part of the Inflation Reduction Act. With those in hand, Wood Mackenzie predicted that 59.2 GW of energy storage capacity will likely be added through 2026.

However, the market was not without its issues.

“Despite impressive growth, the U.S. grid-scale energy storage pipeline continues to face rolling delays into 2023 and beyond,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “More than 1.1 gigawatts (GW) of projects originally scheduled to come online in Q2 were delayed or canceled, although 61 percent of this capacity, 709 megawatts (MW), is still scheduled to come online in Q3 and Q4 of 2022.”

She attributed this to supply chain issues, transportation delays, and interconnection queue challenges. Trade issues brought about by enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) also contributed to solar woes as well, as the federal government cracked down on the trade of anything believed to have resulted from forced labor in China.

Demand continues to push growth in both the solar and storage industries, regardless of trade hindrances and procurement concerns. The residential segment installed more than 150 MW of storage for the first time in Q2, though community, commercial and industrial storage only deployed around 59.4 MW hours, the latter’s lowest quarter since 2019 and a sign of it lagging behind other segments.

“The U.S. energy storage industry is reaching maturity,” Jason Burwen, vice president of energy storage at ACP, said. “Energy storage is now regularly being installed at over a gigawatt per quarter. In addition, Texas overtaking California this quarter should serve as a reminder that generators, customers, and grid operators in all geographies are increasingly relying on energy storage. Combined with the tailwinds of newly available tax credits from the Inflation Reduction Act, the question for investors and grid operators now is not whether to deploy storage, but how much storage to deploy – and how fast.”