US energy storage market reports lowest installation quarter since 2021

Across all industry segments, the US energy storage market added 2,145 MWh in Q1 2023, a 28% decline from Q4 2022. The grid-scale sector installed 1,553 MWh in Q1 2023, a second quarterly decline and down 33% from Q1 2022 installations, according to a new report released today by the American Clean Power Association (ACP) and by Wood Mackenzie.

The latest US Energy Storage Monitor report shows that California and Texas continue to lead the market, accounting for 84% of Q1 activity, but project delays have contributed to the downturn.

“The recent slowdown in the energy storage market shows how storage development is already intertwined with new solar and wind projects, and how trade and policy issues in those sectors are affecting storage deployment,” said John Hensley, ACP’s head of research and analysis. the vice president. “It’s important that we continue to address supply chain and connectivity barriers. The outlook to 2027 is encouraging and we remain confident in the industry’s long-term growth trajectory. The need for energy storage will continue to grow as more clean energy technologies are added to the grid.”

Wood Mackenzie has projected 2023 additions from the grid-scale project pipeline of 8.9 GW and 10.5 GW across all segments. Although forecast capacity for 2023 is down slightly quarter-on-quarter (QoQ), total additions for all segments are still expected to double by the end of 2023 from 2022.

Credit: B2U Storage Solutions

“We are seeing the impact of supply chain issues and interconnection queues hampering market growth,” said Vanessa Witte, senior analyst in Wood Mackenzie’s energy storage team. “This is the first quarterly decline we’ve seen in the energy storage market since 2015, when deployments were much smaller in volume and more unpredictable. Although the market has faced challenges, we expect a stronger second quarter as many project CODs have been placed but are still very viable.”

Community, commercial and industrial installations returned to four consecutive quarters of below-average activity in the first quarter. Overall, this market posted 203.3 MWh in the second-highest quarter on record and 145% higher than last year’s (YoY) figures.

Residential storage posted a record Q2 of 388.2 MWh, but installed capacity for Q4 2022 fell. This was the first QoQ decline for the residential sector in almost two years.

“Our outlook for the storage sector is still bullish, with growth forecast to be strong through 2027. We will see some challenges in the near term, but we expect these to be ironed out and activity to increase as more renewable energy production drives the need. storage”.

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