US storage market to reach 3.9 GW, $4.5B by 2023: Wood Mackenzie

Dive Brief:

U.S. energy storage is poised for rapid growth and will be a $4.5 billion market in 2023, according to a new analysis from Wood Mackenzie. The firm says the value of the storage market will double from 2018 to 2019, and then again into 2020.
Energy storage deployments are expected to "accelerate dramatically" in the United States, growing from 338 MW in 2018 to 659 MW in 2019. By 2020, WoodMac projects more than 1.7 GW will be deployed.
There were 61.3 MW / 136.3 MWh of energy storage deployed in the third quarter in the United States, according to the analysis, dominated by behind-the-meter (BTM) installations. Typically paired with a residential solar system, these batteries accounted for 60% of total MWh deployed in Q3, and 57% of the capacity.

Dive Insight:

Wood Mackenzie analysts say the energy storage boom is about to begin in earnest, with the value of the market and number of batteries expected to multiply rapidly in the next two to three years. And while BTM deployments were the story in the third quarter, the firm expects utility-scale installations will drive most of the growth — at least for the next couple of years.

The front-of-meter (FTM) market "will drive the majority of value through 2020. However, starting in 2021, the BTM market will account for over half the annual market value in dollar terms," according to Wood Mackenzie's report. The firm added that a large FTM pipeline is set to come online in 2020, "accounting for the massive jump over 2019."

There are a variety of incentives, rate tariffs and state initiatives set to roll out in the next few years, and the report says this will help push the market forward, particularly in Massachusetts, New York and New Jersey.

By 2023, Wood Mackenzie expects annual U.S. energy storage deployments of 3.9 GW.

Navigant also released new energy storage research recently, identifying more than 1,900 storage projects worldwide — an increase of about 200 over last year.

"The growing need to modernize global electricity grids and the evolution of business cases for deploying storage ensure that this market will continue to grow quickly over the coming years," Navigant Research analyst Ian McClenny said in a statement.

The firm said there are a host of factors driving development of the storage market, including electricity market restructuring and the growth of variable, renewable energy sources. Navigant said it expects energy storage to "increasingly become a viable option to meet changes in load, which will play a critical role in the structure and operation of the power grid."