The U.S. energy storage sector set a power capacity record in the fourth quarter of 2019, deploying 186.4 megawatts (MW) and 364.2 megawatt-hours (MWh) of storage.
According to Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest U.S. Energy Storage Monitor report, Q4 2019 marks the largest-ever quarter for storage deployments across all US market segments. The report was released on March 10.
The front-of-the-meter (FTM) market spiked 160% in quarter-over-quarter growth, with 103.8 MW deployed in Q4 2019. The FTM market accounted for 56% of quarterly deployments, in MW terms, after two consecutive quarters in which it made up less than 50%.
On a MWh basis, the FTM storage sector grew by 44% quarter-over-quarter, with the implied reduction in average duration, due mainly to new projects in the PJM Interconnection participating in “Reg D” with 1-hour duration batteries.
PJM generates two different types of automated signals that Regulation Market resources can follow. One of them is the Regulation D signal, which is a signal that requires resources to respond almost instantaneously.
While Massachusetts led the FTM rankings, California ruled the behind-the-meter (BTM) segment, the report said. The Public Safety Power Shutoffs (PSPS) in California were a significant driver of growth for the residential segment and create upside going into 2020, according to the report.
The non-residential BTM sector recorded its second-strongest quarter on record, with 42.2 MW deployed. The residential market saw another breakthrough quarter, with 40.4 MW installed in Q4 2019.
Wood Mackenzie and ESA forecast the US energy storage market to grow significantly over the next six years.
The market is expected to expand from an annual deployment of 523 MW in 2019 to 7.3 GW in 2025. Additionally, the market’s total size will surge from $712 million in 2019 to $4.2 billion in 2021 and reach $7.2 billion by 2025. This growth will be largely be driven by utility procurements.
The residential market segment, with its higher prices on a MWh basis, will represent a disproportionate share of the market’s dollar value by 2025 – 26% of revenue compared to only 16% of installed MWh. This will be primarily driven by favorable policies and resiliency concerns in California.