The U.S. energy storage market deployed 310.5 megawatts in 2018, an increase of 44% from 2017, according to a new report from Wood Mackenzie Power & Renewables and the Energy Storage Association.
“California led the market once again, while Hawaii, New York and Texas all had decent showings as well,” the executive summary for the U.S. Energy Storage Monitor said. The report is a quarterly publication of Wood Mackenzie Power & Renewables and the ESA.
According to the report, which includes storage deployment data for 2018 and the first quarter of 2019, front-of-the-meter deployments were light in the first half of 2018 but rebounded in the second half of last year thanks to several large projects in California, Hawaii and Texas that were deployed in the fourth quarter.
Behind-the-meter deployments accounted for 53% of MW deployed in 2018, the report said. The residential market in particular had a strong showing, ranking as the leading segment in Q1 and Q2 2018.
On a megawatt hour basis, 777 MWh of storage was deployed in the U.S. in 2018, growing 80% from 2017.
Outlook for 2019 and beyond
The report said that 2018 saw a number of market developments that laid the groundwork for further market expansion and new business-model development in 2019.
These developments include:
- Federal Energy Regulatory Commission Order 841 filings aimed at expanding opportunities for storage participation in wholesale markets;
- Programs that implement residential storage to provide grid services, creating new revenue streams for a segment historically limited to backup power;
- Record low solar-plus-storage PPA pricing “that illustrates the technology continues to compete head-to-head with incumbent generation;” and
- Battery supply shortages, “which plagued the market in 2018, are set to abate in early 2019, which will alleviate system pricing issues.”
The report said that energy storage deployments in the U.S. are set for substantial growth starting in 2020, when a large number of front-of-the-meter projects are set to come online. The market will double from 2018 to 2019, then nearly triple from 2019 to 2020, according to Wood Mackenzie Power & Renewables and the ESA.
Meanwhile, the report projects that behind-the-meter deployments will constitute 42% of the market in 2024.