According to the latest edition of the “U.S. Energy Storage Market” (March 2024), published by Wood Mackenzie and the American Clean Power Association, energy storage continues its growth as a result of three significant trends.

1 – The U.S. storage market in Q4 shattered previous installation records with help from the grid-scale and residential segments.

– U.S. grid-scale Q4 deployment broke the installation record set in Q3 on both MW and MWh basis with 3,983 MW and 11,769 MWh, which is a 113 percent increase from Q3 in MW terms. For the first time, the grid-scale segment exceeded 3 GW deployed in one quarter and recorded a 358 percent increase compared to the same period last year. California continued to lead installations in both MW and MWh terms.

– U.S. residential deployments reached 218.5 MW, barely beating the previous quarterly installation record of 210.9 MW set in Q3 2023.

– The U.S. CCI (community, commercial, and industrial) segment remained stagnant with 33.9 MW installed in Q4. Installed capacity was split relatively evenly between California, Massachusetts, and New York.

2 – Across all segments, 2023 deployed 8.7 GW, achieving record-breaking growth of 90 percent, compared to 2022 additions.

– While just shy of doubling year-on-year, the year’s record-breaking achievement was projected earlier in 2023 and very much aligns with Wood Mackenzie’s expectations outlined in prior ESM reports. Grid-scale installations in 2023 ended at 7,910 MW and 24,000 MWh, a 98 percent increase over 2022. The organization’s new five-year forecast extends out to 2028, and projects 59 GW of new capacity additions over that timeframe.

– Distributed storage exceeded 2 GWh in 2023, which is another first for the market. Over the next five years, the report predicted that the residential market will continue to boom, with more than 9 GW due to be installed. While the cumulative volume installed for the CCI segment is forecasted to be less than that, at 4 GW, the growth rate is over double, at 246 percent.

3 – Storage system prices experience another double-digit decline QoQ.

– In Q4, battery prices continued to decline rapidly, in large part due to soft electric vehicle (EV) demand compared to projections in the EU and the U.S., along with an oversupply of battery grade lithium raw materials.

– Chinese OEMs are selling DC blocks at aggressively low prices, undercutting competitors in order to gain market share. However, this price pressure isn’t enough for all developers to turn away from the full AC-block solution of a more traditional integrator.