Energy storage projects grow at record levels
The United States deployed 41.2 megawatts of energy storage capacity during the second quarter, up 126 percent from the previous quarter and slightly higher than the same quarter of 2015, according to data released yesterday by GTM Research.
Perhaps more significantly, energy storage is finding new markets beyond longtime sector leader California, which has dominated the storage and battery space, according to GTM.
The largest storage project deployed in the second quarter was in Indiana, where Indianapolis Power & Light Co. (IPL) broke ground on what will be the first grid-scale energy storage system serving customers across the 15-state Midcontinent Independent System Operator region.
While overall growth in front-of-the-meter systems like that installed by IPL fell slightly between second-quarter 2015 and second-quarter 2016, GTM said residential and commercial energy storage systems — known as behind-the-meter systems — increased by a whopping 66 percent, a spurt experts attributed to improving economics and the emergence of new state markets.
“The industry continues to surpass milestones, fueled by increased value and market opportunities, as well as plummeting system costs,” Matt Roberts, executive director of the Energy Storage Association, said in a statement. “After record-breaking deployments in 2015, the energy storage industry is on pace to grow another 30 percent this year — increasing grid flexibility, efficiency and resiliency along the way.”
GTM projects that the United States will deploy just under 300 MW of new energy storage systems in 2016, compared with 226 MW in 2015. By 2021, however, the market is expected to boom to more than 2.1 gigawatts of new capacity, a ninefold increase from 2015.
Utility-scale storage projects will continue to account for the largest share of new deployments over the next few years. But by the end of the decade, residential and commercial systems will account for roughly half of all installations. That shift will be driven in large part by homeowners installing rooftop solar systems with battery storage, officials said.
Ravi Manghani, GTM’s director of energy storage, said investment will also be encouraged by state reforms to net-metering policies, prompting more homeowners to store and use the electricity they produce from solar panels rather than sell it to utilities at sub-retail rates.
At the same time, more states are requiring or incentivizing utilities to invest in storage technologies that help integrate more renewable energy resources into their generation portfolios while helping to maintain a steady flow of power when grid disruptions occur. Arizona, Massachusetts, Oregon, New York and Nevada are among the states where such policies have been adopted or are under discussion.
The market has also been juiced by direct federal spending. The Navy has committed to three energy storage projects, according to GTM, including a 50-to-100-MW grid-scale project at Naval Weapons Station Seal Beach in California, and a 6-MW solar-plus-storage project at Naval Base Ventura County, also in California, GTM said.
“Additionally, the industry received a big boost from the White House,” Manghani said, citing recently announced actions from public- and private-sector entities to add 1.3 GW of new storage deployments over the coming years.
At the same time, legislation to help scale up energy storage passed the U.S. House of Representatives, while the House and Senate proposed bills that would extend investment tax credits for energy storage.