Energy Storage

U.S. Energy Storage Market Set New Record In Second Quarter 2022

The U.S. energy storage market set a new record in the second quarter of 2022, with grid-scale installations totaling 2,608 megawatt hours (MWh), the highest installed capacity for any second quarter on record, according to a new report released Sept. 14. 

According to Wood Mackenzie and the American Clean Power Association’s (ACP) latest U.S. Energy Storage Monitor report, grid-scale storage was boosted by a series of deployments in Texas, with the state contributing 60% of installed capacity this quarter. However, challenges to the sector remain due to delays. 

“Despite impressive growth, the U.S. grid-scale energy storage pipeline continues to face rolling delays into 2023 and beyond. More than 1.1 gigawatts (GW) of projects originally scheduled to come online in Q2 were delayed or cancelled, although 61% of this capacity, 709 megawatts (MW), is still scheduled to come online in Q3 and Q4 of 2022,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. 

“Supply chain issues, transportation delays and interconnection queue challenges were the main drivers behind delays in the commercial operations date for many projects,” Witte added.  

The U.S. Congress passed a solar investment tax credit (ITC) extension and standalone storage ITC as part of the Inflation Reduction Act.

The new law will support all segments of the energy storage industry, increasing deployment of solar-plus-storage systems while also incentivizing standalone facilities, Wood Mackenzie and ACP said. As a result, Wood Mackenzie forecasts 59.2 GW of energy storage capacity to be added through 2026. 

Residential storage also had its strongest quarter to date with 375 MWh installed in Q2, beating the previous quarterly record of 334.1 MWh in Q1 2022.  

Demand is rising in the residential segment with over 150 MW of residential storage installed for the first time, but ongoing supply shortfalls and rising prices have suppressed deployment. New solar installers continue to add storage to their product offerings, despite ongoing procurement issues. 

Community, commercial and industrial (CCI) storage continues to lag behind other market segments, with only 59.4 MWh of CCI storage installations seen this quarter, making it the lowest quarter recorded for MWh capacity since 2019.