U.S. Achieves Remarkable Energy Storage Milestone in Q2 2023

[Sagar Ali]

September 25, 2023 at 12:32 pm

In a significant development for the United States’ energy landscape, the second quarter of 2023 witnessed the country setting a new quarterly record for energy storage installations. According to the latest report, titled the “U.S. Energy Storage Monitor,” jointly released by Wood Mackenzie and the American Clean Power Association, an impressive 5,597 megawatt-hours (MWh) of energy storage capacity was added during this period.

The standout performer in Q2 was the grid-scale energy storage segment, which contributed 5,109 MWh. This achievement not only surpassed the previous record set in Q4 2021 by 5% but also showcased a remarkable quarter-over-quarter growth of 172%. Notably, California played a pivotal role in this success, accounting for 738 MW and a significant 49% share of the total installed capacity.

John Hensley, Vice President of Research and Analytics at the American Clean Power Association, commented on this milestone, stating, “The energy storage market is on pace for a record year, as utilities and larger power users increasingly turn to storage to enhance the grid and improve reliability. The market is on pace to nearly double annual installations despite supply chain challenges and interconnection delays and will continue to grow quickly in the coming years.”

Wood Mackenzie’s projections for the energy storage market indicate that the grid-scale segment will continue to be the primary driver from 2023 to 2027, contributing to 83% of total installations, equivalent to 55 GW.

Vanessa Witte, a senior analyst with Wood Mackenzie’s energy storage team, emphasized the substantial rebound seen in Q2 after consecutive quarterly declines, attributing this resurgence to the realization of projects that were previously delayed due to supply chain issues. However, despite achieving a record, the projected pipeline did not fully materialize, with over 2 GW of projects pushed back.

Community, commercial, and industrial (CCI) installations, totaling 107 MWh, outperformed any quarter in 2022 but experienced a 53% quarterly decline due to the extraordinary spike in Q1 installations. Nevertheless, this segment maintained a healthy 25% year-over-year growth.

Residential storage, on the other hand, recorded its second consecutive quarterly decline, amounting to 381.2 MWh, slightly behind Q1’s 388.2 MWh. California, in particular, witnessed a notable decline, with a 17% decrease quarter-over-quarter and a 37% decline year-over-year.

Looking ahead, Vanessa Witte expressed optimism, stating, “We still project strong growth for the residential segment in our five-year outlook, reaching a total of 8.0 GW in 2027. However, the CCI segment continues to face challenges in meeting growth projections, leading us to revise down its five-year growth forecast by 28% to 3 GW.”