U.S. Energy Storage Installations Set New Record in Q3 2023

According to their most recent “U.S. Energy Storage Monitor” report, the American Clean Power Association (ACP) and Wood Mackenzie stated that the U.S. storage market hit a new high in Q3 2023, installing the most capacity of any quarter to date, with 7,322 megawatt hours (MWh) becoming operational in Q3 2023. The vast majority of this (better than 90 percent) was grid scale storage, with the remaining being in the other two categories: community, commercial and industrial (CCI); and residential.

“Energy storage deployment is growing dramatically, proving that it will be essential to our future energy mix,” said Frank Macchiarola, chief policy officer of the ACP. “With another quarterly record, it’s clear that energy storage is increasingly a leading technology of choice for enhancing reliability and American energy security. This industry will serve as the backbone of our modern grid. As we continue to build a strong domestic supply chain, streamlined permitting and evolving market rules can further accelerate the deployment of storage resources.”

The cumulative volume installed between Q1 and Q3 of 2023, which totals 13,518 MWh, has already surpassed the total volume in all of 2022 which ended at 11,976 MWh. “However, the Q3 installation record could have been greater were it not for the roughly 80 percent of projects in the pipeline expected for Q3 being delayed to a later date,” explained Vanessa Witte, senior research analyst with Wood Mackenzie’s energy storage team.

The breakdown:

Grid Scale: The report noted that the U.S. grid-scale segment saw quarterly installations increase 27 percent quarter-on-quarter (QoQ) to 6,848 MWh, a record-breaking third quarter for both megawatts (MW) and megawatt-hours (MWh) installed.

While the grid scale segment’s 2023 forecast increased just slightly due to strong Q3 volume, the remainder of the forecast lowered by seven percent on average. “The segment is facing multiple headwinds that have emerged this year, resulting in a volatile near-term pipeline and difficulty in bringing projects to mechanical completion,” said Witte.

“Grid-scale declines were more focused on challenges not only with supply and permitting, but also with the backlog of applications in most ISOs interconnection queues that are preventing projects to move through the development process,” Witte continued.

CCI: Deployment in the CCI storage segment fell seven percent QoQ, with installations finalizing at 30.3 MW and 92.9 MWh. Installations in California were notably higher, with a 35 percent increase QoQ.

Interconnection queue challenges and a lack of state policy incentives have limited the CCI segment recently. The 2023 CCI segment forecast declined 12 percent QoQ, as per Wood Mackenzie’s latest analysis. This was largely caused by low installation volumes between Q1 and Q3. “This segment is more reliant on a variety of factors, such as state incentives, community solar programs and standalone potential in various states,” said Hanna Nuttall, a

research analyst with Wood Mackenzie’s energy storage team. “The CCI segment is still forecasted to double in 2024 as California opens its community solar and storage program, Commercial and industrial storage is expected to become a larger share of the forecast in 2025 and beyond, which will bring more geographic diversity to the U.S. market.”

Residential: The residential segment bounced back from the low volume recorded in Q2 to install 166.7 MW and 381.4 MWh in Q3, a 29 percent increase QoQ in MW-terms. The largest increase was in California, which almost doubled its installed capacity QoQ to install 78.4 MW. All other states deployed a combined total of 88.31 MW, falling just short of the 89.53 MW deployed in the previous quarter.

The 2023 residential forecast increased by four percent as the California market began to pick up in Q3 after the passage of NEM 2.0, the state’s new net metering policy. The residential segment is expected to double between 2023 and 2025, but growth slows later in the forecast period as solar penetration in California heightens. In other states, incentive programs and solar compensation rates will continue to be the biggest predictor of growth, even as the market faces near-term economic headwinds.

The report added that the total U.S. storage market is forecasted to install approximately 63 GW between 2023 and 2027 across all three segments, a five percent decline from the Q2 forecast, according to the latest report.


The First Step Starts with Finley… and a FREE Consultation!

WP Twitter Auto Publish Powered By : XYZScripts.com