Total U.S. energy storage installs rise in Q2, but residential dips because of supply shortages
According to Wood Mackenzie, a Verisk company, and the latest news from the US Energy Storage Association (ESA)US Energy Storage Monitorreport, 345 MW of new energy storage systems brought online in Q2 2021.
This is a 162% increase from the same quarter in 2020, making the second quarter of 2021 the second-largest quarter ever in megawatts for additions to U.S. energy storage. Market momentum continues to grow as unprecedented volume of storage will come online in the second half of the year, with Wood Mackenzie expecting storage projects representing more than $5 billion in investment to come online in 2021 alone.
Despite positive market momentum in the United States, the residential battery market declined slightly, the segment’s first decline in nine quarters (since Q4 2018). Equipment constraints, including an ongoing shortage of Tesla Powerwall, are hampering the segment’s growth, despite the proliferation of new residential storage players.
In the non-residential segment, which includes on-premises and community-scale storage, quarter-over-quarter deployment grew 31%, driven by the growth of the Massachusetts community storage market.
The front-of-the-meter (FTM) market entered 218 MW/729 MWh in the second quarter of 2021, with California, Texas and Arizona leading the segment. California continued to lead the FTM segment in the second quarter, with the replacement of Arevon/Capital Dynamics’ peak 100-MW/400-MWh Saticoy Energy Storage facility in Ventura County contributing the majority of the megawatts for the quarter. Solar + storage projects in Texas and Arizona have also bolstered Q2 FTM capacity.
“The United States remains on track for a record year, further demonstrating the growing adoption of battery storage within the energy market and underlining its importance to the energy transition,” said Vanessa Witte, senior energy storage analyst at Wood Mackenzie.
“While the US energy storage market has experienced tremendous growth this year, government policies still need to support the pace of implementation needed to meet decarbonization and resilience goals,” said Jason Burwen, interim president. CEO of the US Energy Storage Association. “An investment tax credit, which has boosted industries such as solar and wind, could do the same for the energy storage industry – with the added benefit of driving more investment decisions in the supply chain onshore.”
In the second quarter, policy support continued to grow, with several new government incentives for residential and non-residential storage. The industry is also still awaiting the outcome of the budget reconciliation expected this winter, which will include an extension of the solar investment credit (ITC) and/or a standalone storage ITC. A positive result would upgrade the energy forecast for all segments.
News item from ESA