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US energy storage installations break Q1 record

The US energy storage market has set a new record in the first quarter of 2022, with grid-scale installations totaling 2,399 MWh.

The US energy storage market has set a new record in the first quarter of 2022, with grid-scale installations totaling 2,399 MWh, the highest capacity for Q1 on record.

The record figure is courtesy of the latest report by Wood Mackenzie and the American Clean Power Association (ACP).

Recurrent Energy has acquired two standalone battery storage systems under development in Texas. (Courtesy: Recurrent)

Their US Energy Storage Monitor report illustrated how the volume of US grid-scale installations was four times the volume seen in Q1 of 2021, despite continued procurement difficulties and project delays.

This story was originally published on Smart Energy International. You can read that version here.

“Quarter one of 2022 was the largest first quarter on record by far for grid-scale installations, a notable milestone since installations are typically back-weighted to the second half of the year. The West Coast and Southwest regions continue to dominate for both standalone and hybrid systems,” stated Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team.

Despite significant growth, near-term risks remain for the grid-scale market.

According to ACP, market disruption from the anti-dumping and countervailing duties (AD/CVD) solar tariff investigation initiated by the department of commerce in March lowered projections for hybrid projects significantly in 2022, and to a lesser extent in 2023, as procurement stalled.

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“The Biden Administration’s recent decision to pause AD/CVD solar tariffs for two years restores predictability to both the solar and energy storage markets,” stated John Hensley, vice president of research and analytics at ACP.

“With well over 50% of utility storage projects being paired with solar farms, this important executive action will help the energy storage market continue to accelerate,” Hensley added.

The report points out how residential storage also had its strongest quarter to date with 334 MWh installed in Q1, beating the previous quarterly record of 283 MWh in Q4 of last year.

By 2026, the residential storage segment is forecasted to grow by 5.7 GWh annually, with California’s Net Energy Metering (NEM) 3.0 expected to align with the California Public Utilities Commission’s December 2021 proposed decision with implementation now on a delayed timeline.

Rooftop SolarA rooftop solar system.

“Despite challenging supply conditions continuing to suppress residential storage, the segment saw over 20,000 installations in a single quarter for the first time and we’re seeing large and small installers forge new vendor partnerships to help meet rising customer demand,” elaborated Chloe Holden, an analyst with Wood Mackenzie.

Non-residential storage is predicted to grow 1 GW annually by 2026, but the overall market forecast has been downgraded due in part to AD/CVD-related procurement delays. “A meaningful share of residential solar-plus-storage projects not yet procured are being pushed to 2023, which has impacted paired storage,” Holden added.

Overall, the US energy storage market added 955 MW and 2,875 MWh across all segments in the first quarter of 2022.

“California continues to dominate the sector, with the Valley Center and Slate projects taking the top two spots for largest projects installed in Q1. We also saw more than 90MW of storage come online outside the top seven states, including projects in Oregon and Alaska,” Witte said.

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