In the Q1, US sets an energy storage record
According to the newest “US Energy Storage Monitor” report from the U.S. Energy Storage Association (ESA), 910 megawatt-hours (MWh) of new energy storage systems went online in Q1 2021. With 910-megawatt hours online in the first quarter, the deployment of energy storage slowed. However, following a record-breaking final quarter of 2020 in which about 2,000 MWh were generated. Nonetheless, performance increased by more than 252% in the first quarter of 2021. When compared to the same period the previous year, this is the greatest Q1 for the US storage industry so far.
Separately, National Renewable Energy Laboratory (NREL) researchers examined diurnal storage (lasting more than 12 hours). They identified the potential for 125 GW of installed capacity by 2050. This is a fivefold increase over the existing installed capacity of 23 GW.
According to the NREL study, battery storage capacity might be at least 3,000 times bigger than it is now. According to the report, storage deployment in 2050 may vary from 130 to 680 GW, depending on cost trajectories and other variables, demonstrating a “rapidly rising possibility for diurnal storage in the power sector.”
Stand-Alone Storage Investment Tax Credit (ITC) And Q1
The introduction in Congress of a stand-alone storage investment tax credit (ITC) was one of the most significant storage market developments in Q1. According to the ESA analysis, if Congress passes a stand-alone storage investment tax credit (ITC) this year, it may result in a 20-25% upgrade to the market’s five-year forecast in megawatt terms.
“It is clear that the energy storage industry is poised for significant growth in 2021 and beyond,” stated Interim CEO of the Energy Storage Association Jason Burwen. With the convergence of a transforming power and transportation system, as well as the rising demand for decarbonization and resilience, the ‘Storage Decade’ has arrived.
“As the primary voice of the US energy storage sector, ESA is pleased to see the industry continue to establish new records. This study also provides a timely estimate of how a federal ITC for energy storage might work. Congress is now debating whether to accelerate our market’s development trajectory. It is expected to help us get closer to our goal of 100 GW of additional energy storage by 2030.”
The front-of-the-meter (FTM) category would see the most incremental growth with a stand-alone ITC, with an additional 6 GW of capacity through 2025. The FTM segment could add 3,674 MW in 2021 and 6,915 MW in 2026 without the federal tax incentive.
In March, approximately 150 groups appealed to House and Senate leaders in the United States to include standalone energy storage projects in the infrastructure package and make them eligible for the ITC.
The following organizations have joined forces with solar and storage industry associations to advocate for standalone storage ITC eligibility.
- The Union of Concerned Scientists
- The National Resources Defense Council
- The Environmental Defense Fund
- The Environmental Law and Policy Center
US residential storage market
According to the report, the US domestic storage sector hit yet another quarterly record in the first quarter of 2021. The market has risen for nine quarters in a row. For the first time, it deployed more than 100 MW in a single quarter in Q1.
Growth in the non-residential industry has been slower than in other sectors. Each of the preceding five quarters saw the installation of between 25 and 35 MW of new projects.
The study also mentions that the FTM connection queue has grown to more than 200 GW. Despite the fact that the majority of the projects in the backlog will not be implemented, the queue is the greatest it has ever been. It depicts the rapid growth of the FTM storage business in the United States. In terms of FTM project interest, there is a definite trend toward more geographic variety. With an increase in interconnection queue requests originating from places other than the incentivized locations.