Energy research and consultancy group Wood Mackenzie released its latest ‘US Energy Storage Monitor’ report earlier this month. According to the group’s forecasts, expect the US to add nearly 12,000 MWh of new storage throughout 2021. Indeed, this would be three times the amount of new storage added in 2020.
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About US energy storage results in Q1 2021
Worth noting, Wood Mackenzie said in its joint report with the US Energy Storage Association that, in Q1 2021, approximately 910 MWh of new energy storage systems were brought online. Accordingly, this represents an increase of 252% over Q1 of last year, making it the most significant Q1 so far for the US storage market historically.
However, after a record-setting quarter for deployments in Q4 of 2020, the pace of storage deployments slowed in Q1 202. Nevertheless, despite this, the US storage market still notched its third-highest megawatt (MW) total for one quarter.
Worth noting, Wood Mackenzie highlighted that one of the most significant storage market developments in Q1 was introducing a stand-alone storage investment tax credit (ITC) in Congress.
Accordingly, a storage ITC would result in a 20-25% upgrade to Wood Mackenzie’s five-year market outlook in megawatt (MW) terms if passed this year.
In this regard, Chloe Holden, Wood Mackenzie Energy Storage Analyst, said in a statement; “An extra 20 to 25% growth for the US market over the next five years would supercharge an already fast-growing energy storage market.”
Moreover, “the front-of-the-meter (FTM) segment would see the largest incremental growth; particularly with an extra 6 GW of capacity expected through 2025,” continued Holden. In fact, this is 25% of our base case market forecast. Thus, without the stand-alone storage ITC, we forecast that the FTM segment will add 3,674 MW in 2021 and 6,915 MW in 2026.”
The Storage Decade
Similarly, Jason Burwen, ESA Interim CEO and consulted by Wood Mackenzie, said; “It’s clear that the energy storage market is poised for tremendous growth in 2021 and beyond. Therefore, the ‘Storage Decade’ is upon us with the convergence of a transforming power and transportation system. Also, with the growing need for decarbonization and resilience.”
Besides, Burwen added that “as the leading voice of the US energy storage industry, ESA aims to see more record-setting growth for the industry”. Similarly, he highlighted that Wood Mackenzie’s report also provides a timely forecast of how a federal ITC for energy storage would accelerate our market growth trajectory; particularly realizing the industry’s vision of 100 new GW of energy storage by 2030 closer to reality.
Worth noting, the report also notes that the US residential storage market set another quarterly record in Q1 2021. Accordingly, the market grew for nine quarters in a row and broke 100 MW deployed in a single quarter for the first time in Q1.
On the other hand, the non-residential market (commercial and community-scale) is not seeing the same growth. For instance, it only accounted for between 25 and 35 MW of new projects installed in each of the last five quarters.