US Energy Storage Market Sets Record for Deployments in Q2: WoodMac

The US energy storage sector saw its strongest Q2 on record for deployments, according to Wood Mackenzie and the US ESA’s latest report

The United States energy storage sector saw its strongest second quarter on record for deployments. According to Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest ‘US Energy Storage Monitor’ report, 168 MW were deployed in Q2 2020. This is an increase of 72 percent quarter-over-quarter, 117 percent year-over-year and is the second-highest quarterly total ever seen, falling just behind Q4 2019 (186.4 MW).

One large front-of-meter (FTM) project coming partially online in California, accounting for more than two-thirds of the total FTM MW deployed, helped to drive this level of quarterly activity. The large-scale system puts California back on the map after a quiet 2019 and, according to the report, the state is expected to remain there over the next six quarters.

The US FTM market grew more than fourfold compared to Q1. Deployments notched their fifth-best quarterly total (89.8 MW) and the largest Q2 on record.

Another record quarter for residential storage deployments, which increased 28 percent YoY, illustrates that California and Hawaii successfully kept installations progressing through coronavirus lockdowns.

Dan Finn-Foley, Wood Mackenzie Head of Energy Storage, said “the US energy storage market has proven remarkably resilient to impacts from coronavirus lockdowns. The commercial and industrial (C&I) space was the only segment that showed a slowdown. This was primarily because of a decline in the C&I California market due to permitting and other delays. We expect the rest of the year to come in strong as growing interest in residential storage, emerging new markets for C&I and massive FTM systems are set to break quarterly records.”

As per the report, the non-residential market demonstrated more volatility than the residential market in the second quarter of 2020.

At 29.5 MW, the segment notched its second quarterly decline in deployments. Quarterly deployments fell by 7 percent QoQ as the market absorbed the shocks from coronavirus lockdowns more acutely than the residential segment. However, despite the segment’s setback, it still achieved its fifth-highest level of quarterly deployments thanks to surging installations in Massachusetts.

With Q2 deployments setting a record this year, Wood Mackenzie and ESA forecast the US energy storage market to grow significantly over the next six years.

The report goes on to add that the US market will grow more than sevenfold by 2025 compared to the annual market in 2020. In that timeframe, MWh growth is expected to accelerate faster than MW growth as average discharge durations increase over time due to a focus on services such as capacity increase.

The team expects the residential segment will continue its upward trend, beating its 2020 numbers sixfold in 2025. The non-residential segment will see an annual market in 2025 that is eight times bigger than the 2020 market.