The U.S. energy storage market set a record in the fourth quarter with new system installations totaling 4,727 megawatt hours (MWh), according to Wood Mackenzie and the American Clean Power Association’s latest U.S. Energy Storage Monitor report.
Even with project delays, there was more energy storage capacity installed in fourth-quarter 2021 than there was in the first three quarters of the year combined, the report said. And, on an annual basis, deployments of grid-scale energy storage nearly tripled year-over-year to 3 gigawatts (GW), 9.2 gigawatt hours (GWh).
Despite a record year, the grid-scale energy storage market did not meet expectations in 2021, the report said. Supply chain challenges delayed more than 2 GW of capacity into 2022 and 2023. Supply chain pressures and delays within interconnection queue processing will persist through 2024, Wood Mackenzie forecast.
“2021 was yet another record for the U.S. energy storage market, with annual installations of multiple gigawatts for the first time,” Jason Burwen, vice president for energy storage at American Clean Power, said in a statement. “Even in the face of continued macro-economic headwinds, interconnection delays, and lack of proactive federal policy, increasing demand for resilient clean energy and volatility in the price of fuel-based generation will drive energy storage deployment forward,” he said, adding, “despite supply tightness leading to some project delays, the grid-scale market is still on track for exponential growth.”
In the non-residential market sector, there were 131 MWh of non-residential energy storage installations in the fourth quarter which brought total annual deployments in 2021 to 162 megawatts (MW), 350 MW hours.
Increased storage attachment rates in community solar markets of New York and Massachusetts were the main driver of demand for storage in the non-residential market, the report said.
The residential energy storage market had its strongest quarter to date with 123 MW installed, beating the previous quarterly record of 110 MW in the first quarter of 2021, the report said.
Increasingly effective solar-plus-storage sales in markets outside of California helped establish the new quarterly benchmark and resulted in a national annual total of 436 MW, according to the report.
By 2026, annual installations in the residential market segment are expected to hit 2 GW, 5.4 GWh, with California, Puerto Rico, Texas, and Florida leading the residential market, the report said.
California will continue to be the largest residential energy storage market with three-and-a-half times more storage installed annually in 2027 compared with 2021, the report found.