The US energy storage market set a first quarter record for installed capacity in the first quarter of 2024, with 1,265 MW deployed across all segments. This is the highest storage capacity ever installed in a first quarter in the United States, representing an 84% increase from Q1 2023.
According to Wood Mackenzie and the American Clean Power Association (ACP) recently released report ‘US Energy Storage Monitor’, the grid-scale segment installed 993 MW, producing the highest Q1 ever for the grid-scale segment. Nevada, California and Texas accounted for 90% of the new added grid-scale capacity.
“The rapid growth of the energy storage industry comes at a critical time to address growing energy demand and ever-changing weather conditions that are putting additional strain on the electric grid,” said John Hensley, vice president of Markets and Policy Analysis at ACP . . “A strong start to 2024 creates high expectations for the rest of the year. We look forward to celebrating the industry’s first double-digit installation year and cheering on the exciting race for best storage status between California and Texas.”
The residential segment set a record for quarterly installations of 250 MW in the first quarter, an increase of 8% over the previous record set in the fourth quarter of 2023. California drove the growth in the residential segment, installing 24% more than the previous quarter. California also led the community, commercial and industrial (CCI) segment with the installation of 19.4 MW, representing a 43% decline quarter-over-quarter (QoQ), as both New York and Massachusetts had among the slowest CCI quarters of recent years.
Despite seasonal patterns of project installations resulting in a decline in QoQ, the first quarter installation additions of 993 MW in the grid-scale segment represent a 101% increase compared to the first quarter of 2023. The segment is forecast to grid scale at the end of 2024 will end with 11.1 GW installed, a value of 45 GW. % increase year-on-year. Texas will overtake California this year in new installed capacity (in megawatt terms) as price volatility continues to grow among both, increasing renewables and increasing load growth in the less regulated market.
50 MW energy storage system at the Golden Triangle II project in Mississippi. Credit: Origis Energy
The residential segment also grew, with California tripling the number of residential energy storage installations between the first quarter of 2023 and the first quarter of 2024. With a seizure rate in the first quarter of 46%, there is still room for growth. At a national level, high interest rates continue to impact the residential segment, increasing the share of third-party installations.
The CCI segment had a negative quarter. CCI storage deployments in California have stalled as the majority of interconnected systems are still under NEM 2.0. The number of implementations is expected to increase as the full effects of NEM 3.0 are realized in the coming years. While both New York and Massachusetts had down quarters, this near-term performance is attributable to the low quarterly number of installations in the CCI segment and will likely be offset by the pipeline of new projects expected to come online in 2024 and 2025 will come.
The US energy storage market is expected to see 12.9 GW deployed across all segments by 2024. New capacity additions will exceed 10 GW for the first time ever, with a forecast 75 GW for all segments through 2028, the report said. . Wood Mackenzie’s five-year grid-scale forecast is up 5% quarter-on-quarter in MW terms, largely driven by a larger pipeline of announced projects. The pipeline expansion brings the cumulative volume of new additions through 2028 to 62.2 GW.
News item from Wood Mackenzie
