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Astounding 1 GW of utility-scale energy storage installed in Q3 2021

By Kelly Pickerel | December 9, 2021

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The U.S. energy storage market set a new record in the third quarter of 2021, with new system installations totaling 3,515 MWh.

Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest U.S. Energy Storage Monitor report said with market momentum building, it is likely this storage market record will be broken in the fourth quarter.

In addition, an expected solar investment tax credit (ITC) extension, standalone storage ITC, and California solar and storage mandate are all assumed in the forecast for the first time this quarter, significantly increasing forecasted storage deployment.

“After achieving 1 GW of annual installations for the first time last year, U.S. energy storage companies just installed 1 GW of projects in one quarter,” said Jason Burwen, the interim chief executive of the U.S. Energy Storage Association. “Storage has always been seen as a game-changing technology — and this quarter shows that the game of power system investment has officially changed.”

The third quarter saw the utility-scale front-of-the-meter (FTM) market deploy 998 MW/3,198 MWh, with California, Texas and Arizona leading the segment.​ (The FTM market deployed 218 MW/729 MWh in Q2 2021.)

California continued to lead in FTM project deployment, with a trio of projects developed by NextEra Energy Resources near Blythe contributing the majority of the megawatt capacity for the quarter. Storage projects in Texas developed by Broad Reach Power also boosted third-quarter FTM capacity.​

“Wood Mackenzie expects up to 4.7 GW of utility-scale storage to come into operation in 2021, which means this record-breaking quarter is only the beginning of a wave of major new projects set to come online this year and next,” said Vanessa Witte, storage analyst at Wood Mackenzie.

Installations increased slightly in the residential market as attachment rates continue to rise, with another 97.9 MW/225 MWh of new residential storage brought online in the quarter​.

But project timelines for residential solar + storage remain problematic, with solar module and battery constraints among the challenges contributing to project backlogs. However, vendors and installers managed to increase residential storage deployment over the second quarter.

The non-residential market recorded its best quarter of 2021 so far, with 43.6 MW/92.1 MWh deployed.

Commercial virtual net metered and community solar projects with storage attached contributed most of the non-residential capacity in the third quarter, with most behind-the-meter non-residential projects sited in California.​

News item from WoodMac

About The Author

Kelly Pickerel

Kelly Pickerel has over a decade of experience reporting on the U.S. solar industry and is currently editor in chief of Solar Power World.

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