The U.S. energy storage market is no longer in its infancy. According to GTM Research and the Energy Storage Association’s newly released U.S. Energy Storage Monitor 2017 Year in Review, 100 megawatt-hours of grid-connected energy storage were deployed in the fourth quarter of the year, marking 1,080 cumulative megawatt-hours deployed between 2013 and 2017.
Even more impressive, GTM Research expects that the U.S. market will almost double this total in 2018 alone, with more than 1,000 megawatt-hours of energy storage forecast to be deployed this year.Source: GTM Research / ESA U.S. Energy Storage Monitor
“We’re going to have to strike the word ‘nascent’ from our vocabularies when describing the U.S. energy storage market,” said Ravi Manghani, GTM Research’s director of energy storage. “Falling costs and favorable policies will be among the core drivers of the market’s breakout 2018. It's not hard to imagine that every solar RFP by the end of the year will include storage.”
“The recent unanimous landmark decision issued by the Federal Energy Regulatory Commission is expected to lay the groundwork for the integration of energy storage technologies into the U.S. wholesale markets in a manner that compensates storage for the full range of value it is already capable of providing to the grid and end users,” said Kelly Speakes-Backman, CEO of ESA. “Policies and regulatory frameworks that level the playing field will further encourage energy storage deployment throughout 2018 and beyond as the industry builds toward a goal of realizing 35 GW by 2025.”
The U.S. energy storage market grew 27 percent in 2017, with 431 megawatt-hours deployed on the year. While the front-of-meter market made up the largest share of deployments, it was the behind-the-meter market that stole the show this year, growing 79 percent year-over-year with record deployments in both the residential and non-residential segments.
Source: GTM Research / ESA U.S. Energy Storage Monitor
According to the report, California led the way in the behind-the-meter market, thanks in large part to its Self-Generation Incentive Program, while other markets such as Hawaii, Massachusetts and New York saw strong growth as well.
The report notes that the front-of-meter market was up 19 percent quarter-over-quarter thanks to longer-duration systems in North Carolina. In fact, GTM Research and ESA highlighted an emerging trend toward longer average discharge durations, leading to greater growth in megawatt-hour terms. While several major projects slipped from the fourth quarter of 2017 into 2018, the front-of-meter segment was still up 10 percent annually in megawatt-hour terms on the year.
The end of 2017 saw discussions of the Section 201 solar trade case, which ultimately led to a decision by the Trump administration in January 2018 to impose tariffs on imported solar cells and modules. Though the tariffs are specific to solar technology, there are implications for the energy storage market. GTM Research expects the market to feel the impact of the tariffs most heavily in 2019 for both solar and storage. However, the U.S. storage market will be somewhat insulated thanks to standalone storage applications and solar developers seeing storage as a value-add for their business.
According to the report, the annual value of the U.S. energy storage market will exceed $1.2 billion in 2019.
Key findings from the report include:
- The U.S. deployed 100 megawatt-hours of grid-connected storage in Q4 2017
- The U.S. deployed 431 megawatt-hours of grid-connected storage in 2017
- Cumulative deployed energy storage capacity exceeded 1,000 megawatt-hours in 2017
- GTM Research forecasts 1,233 megawatt-hours of grid-connected storage will be deployed in 2018
- Lithium-ion held 98.8 percent market share in Q4 2017, leading the market for the 13th straight quarter
- GTM Research estimates that the annual value of the U.S. energy storage market will exceed $1.2 billion in 2019