The U.S. energy storage industry added 1,680 MW/5,597 MWh in the second quarter of 2023, marking the strongest quarter on record and reversing two straight quarters of stalled growth, said a report released Monday by consulting firm Wood Mackenzie and the American Clean Power Association.
The grid-scale segment of the storage sector led the growth, contributing 1,510 MW/5,109 MWh to the total Q2 additions. The community, commercial and industrial, or CCI, and residential storage sectors have continued to decline quarterly.
“[CCI] installations, at 107 MWh, were higher than any quarter in 2022 but could not keep pace with the huge spike in Q1 installations, resulting in a 53% quarterly decline,” said ACP in a release. “However, the segment is still up 25% year-over-year.”
In addition, the report said that Q2 installations overall had “materialized notably lower than the project pipeline indicated, resulting in well over 2 GW of projects pushed to later years.”
The previous quarterly report from ACP and Wood Mackenzie found that the U.S. energy storage market added 2,145 MWh of new capacity in the first quarter of this year – a 33% drop in added MWh compared to the first quarter of 2022, and a 26% drop from Q4 2022.
That was the first time that installed storage capacity additions had decreased for two consecutive quarters since 2015. The report attributed this decline to supply chain difficulties and backlogged wind and solar projects in the interconnection queue.
“We saw a huge bounce back in Q2 after consecutive quarterly declines in the market,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “Many projects delayed from prior quarters, largely due to supply chain issues, were able to come to fruition this past quarter.”
“However, even with the record, the projected pipeline did not fully materialize,” Witte said, referring to the 2 GW in projects pushed to later dates.
Wood Mackenzie projects that between 2023 and 2027, the U.S. storage market will install close to 66 GW, with grid-scale installations accounting for 55 GW, or 83%.
The grid-scale sector is “bolstered by a growing, healthy near-term pipeline,” Wood Mackenzie said, while noting that its “forecasts assumes supply chain and interconnection queue challenges will continue the trend of delayed projects that has been prevalent since early 2022.”
The residential segment is expected to grow to 2.2 GW in annual installations by 2027, but the report projects that CCI will add a bit less than 1 GW that year.
“The residential solar forecast drives the residential storage forecast due to the high number of paired systems,” said the report. “In contrast, the CCI forecast is more dependent on a variety of factors, such as state incentives, community solar programs and standalone potential in various states.
