US energy storage market hits installation record in Q1

The U.S. energy storage market set a first-quarter record for capacity installed this year, with 1,265 megawatts (MW) deployed across all segments, a report by Wood Mackenzie and the American Clean Power Association’s (ACP) shows.

This marks the highest storage capacity ever installed in a first quarter in the country, representing an 84% increase from last year’s first quarter. When compared to the final quarter of 2023, however, the rise is about 29% in terms of megawatts.

Energy storage technologies allow excess energy to be saved for use when power generation falls short of demand. This helps achieve flexibility, enhance grid reliability and power quality and accommodate the scale-up of renewable energy.

The states of Nevada, California and Texas led that way, accounting for 90% of new grid-scale capacity added.

“The rapid growth of the energy storage industry comes at a critical time, providing a solution to growing energy demand and increasingly variable weather conditions that are placing added stress on the grid,” said John Hensley, vice-president of markets and policy analysis at ACP.

The residential segment set a record for quarterly installations at 250 MW in the first quarter, an 8% increase over the previous record set in last year’s final quarter. California drove growth in the segment, installing 24% more than the previous quarter.

California also led the community, commercial, and industrial (CCI) segment to install 19.4 MW, which represents a 43% decline quarter-on-quarter, as both New York and Massachusetts experienced one of the slowest CCI quarters in recent years.

Declining costs

The report also shows that storage costs from the cell to block level continue to decline — not only as a direct result of lithium cost reductions, but also due to global supply chain dynamics, such as oversupply and marketplace competition.

Looking ahead, the report predicts that the U.S. energy storage market will see 12.9 GW deployed across all segments this year. New capacity additions are due to break the 10 GW mark for the first time ever, with 75 GW forecasted across all segments through to 2028, according to the study.