Behind-the-meter storage has record quarter, GTM-ESA report says

Dive Brief:

The second quarter of 2017 saw record growth in behind-the-meter energy storage, according to the U.S. Energy Storage Monitor published by GTM Research and the Energy Storage Association.
Behind-the-meter storage deployments increased by 141% quarter-over-quarter with the non-residential segment growing 158% from the first quarter and the residential segment growing 70% from the first quarter.
Overall, however, there were 38 MW of energy storage deployed in the U.S. in the second quarter, a 47% decrease from the 71.1 MW deployed in the first quarter and an 11% decline from the 42.8 MW deployed in the second quarter of 2016.

Dive Insight:

Energy storage installations in California and Hawaii resulted in a surge in behind-the-meter deployments, according to the GTM-ESA report.

After several sluggish quarters, energy storage picked up in Hawaii, particularly in the state’s Customer Self-Supply program, which is one of two alternatives the state implemented when it ended its net metering program. Self-supply customers cannot sell excess solar power back to the grid. A total of 71% of storage deployments in Hawaii came from the self-supply program.

But California was the leader in residential behind-the-meter installations as a result of the state’s Self-Generation Incentive Program (SGIP). “Toward the end of this year, we expect to see more SGIP-related deployment activity as the first deployments from the modified program, which opened in May, start to be interconnected,” Brett Simon, an energy storage analyst at GTM Research, and one of the report’s authors, said in a statement.

Front-of-the-meter installations, which typically represent the bulk of deployments, fell in the quarter. The decline came after two consecutive quarters in which more than 200 MWh were deployed. Most of the previous quarter deployments were the result of storage projects installed to help alleviate potential generation shortfalls stemming from fuel shortages because of the Aliso Canyon gas leak.

Overall, GTM Research expects the U.S. energy storage market to grow to about 2.5 GW in 2022 from 231 MW in 2016.

That growth should be aided by several policy changes implemented in the second quarter, including measures in Arizona, Nevada, New Jersey, New Mexico and Virginia that encourage utilities to include energy storage in their planning processes.