The U.S. energy storage market experienced significant growth in the second quarter, with the grid-scale segment leading the way at 2,773 MW and 9,982 MWh deployed.
According to the American Clean Power Association’s (ACP) and Wood Mackenzie’s latest “U.S. Energy Storage Monitor” report, every segment of the market experienced growth in Q2 over year-ago totals, with community and commercial (CCI) increasing 61% to 87 MWh and residential increasing 12% to 423 MWh. In total, the market saw 3,011 MW and 10,492 MWh deployed, the second-highest quarter on record behind Q4 2023 at 13,437 MWh.
California, Arizona and Texas were responsible for 85% of installations.
“This quarter showed massive growth compared to year-ago levels and the grid-scale segment continues to be the main driver,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “Community performed strongly as well. And while residential did expand, it was still a somewhat slow quarter as California’s meteoric growth faltered, combined with low installations in Hawaii and Puerto Rico, which continue to be affected by incentive changes.”
According to Wood Mackenzie’s five-year outlook for the U.S. energy storage market, total U.S. storage deployments will grow 42% between 2023 and 2024, but capacity additions will level out as deployments increase with an average annual growth rate of 7.6% between 2025 and 2028. Across all segments, the industry is expected to deploy 12.8 GW/36.9 GWh in 2024.
The grid-scale segment is projected to increase 32% year-over-year with 11 GW/32.7 GWh deployed by year-end, and 62 GW cumulatively from 2024-2028. Over the next five-years,12 GW of distributed storage will be deployed. The residential segment will constitute 80% of distributed power capacity installations, with 10 GW of storage capacity additions between 2024-2028. The CCI segment is forecasted to install 2.5 GW of storage between 2024 and 2028, a modest reduction from previous forecasts.
“Growth flattens in 2025 and 2026 as project capacity is pushed into later years of the forecast largely due to early-stage development challenges,” said Witte. “The CCI segment continues to experience high barriers to growth including the complexity of developing these projects and the limited availability of financial value streams.”
At the residential level and consideration that electric utilities are “moving towards” TOU rate spiking programs every day and in particular right now it seems 3 PM to 8 PM or 4 PM to 9PM seems the proper TOU period to these utilities, at least for now. As interconnection of grids becomes the current goal backed up by short term utility scale BESS to long term utility scale BESS of 8, 12 hours and up to 100 hours using something like redox flow batteries. The utilities will probably find the actual 24 hour day TOU periods may shift to say 6 AM to 9 AM, then perhaps the practice of 4 PM to 8 or 9 PM, then if electric vehicles start a parabolic increase on the grid after say 5PM each day it might become a TOU with sliding scale rates from 5 PM to 10 PM each day and electricity rates of from $0.17/kWh to $0.35/kWh for those 5 hours each day. Basically this 6-9 AM then 5-10 PM TOU scenario would require 8 hours of peak electricity shaving capability. Depending on the home and the residents, this may look like from 20kWh to 60kWh battery storage availability on any given day.
This is where it would be more important to have a smart BESS like the Sonnen ecolinx to program arbitrage into the unit and take off peak or super off peak energy from the grid and use this during the TOU period each day, no solar PV needed. As one gets used to their system add solar PV to charge up the battery during the peak solar part of the day usually 9 AM to 2 PM to suppliment the homes energy each day, plus self consumption of the solar PV generated each day.