The United States non-residential storage market had its strongest quarter ever in Q1 2019, according to the new U.S. Energy Storage Monitor from Wood Mackenzie Power & Renewables and the U.S. Energy Storage Association (ESA). Q1 2019 was also the second strongest quarter on record for the U.S. residential storage segment.
Overall, Q1 2019 was the largest ever single quarter for U.S. energy storage deployments in megawatt terms, an increase of 232% year-over-year. The quarter was the second largest ever in megawatt-hour terms. The United States saw 148.8 MW of energy storage deployed in Q1 2019, breaking the previous megawatt record set in Q4 2018 by 6%.
“These first quarter numbers indicate that 2019 will be a banner year for energy storage in the United States,” said ESA CEO Kelly Speakes-Backman. “It’s become clear that states are already unlocking the potential of storage by passing legislation and creating regulatory frameworks to encourage energy storage deployment. The industry is responding by developing storage projects and creating jobs in their states.”
California once again led the U.S. storage market in Q1 2019, while Arizona, New Jersey and New York also posted strong growth. State level regulatory activity, such as the Value of Distributed Energy Resources (VDER) proceeding in New York state and the Solar Massachusetts Renewable Target (SMART) Program in Massachusetts, continue to spur pipeline buildout in these states and position them for substantial growth in the next few years.
“Based on activity this quarter, we’re keeping an eye on New York state,” said Wood Mackenzie Power & Renewables senior energy storage analyst Brett Simon. “When the New York bridge incentive opened at the end of April 2019, the first block of the retail incentive was fully subscribed in a little over a week, showing how much pent up storage demand there was in New York. New York also updated its VDER program to guarantee greater certainty for compensation under the program’s value stack, which is a boon for energy storage projects in the state.”
Federally, FERC declined to rehear Order 841 and denied extensions for compliance, demanding that transmission organizations meet the original late 2019 deadlines.
Behind-the-meter (BTM) deployments, which include residential, commercial and industrial storage, constituted 46% of Q1 2019 deployments in megawatt terms in Q1, growing 36% quarter-over-quarter and 138% year-over-year. Front-of-the-meter (FTM) storage also grew significantly year-over-year. Wood Mackenzie notes that there is now five-times as much FTM storage in the United States than there was at the end of Q1 2018.
An increasing proportion of new FTM and BTM solar projects are being paired with storage, which is helping to drive the market forward. Although some supply constraints strained the storage market in 2018, ongoing resolution of those constraints are contributing to this year’s market uptick.
Wood Mackenzie expects U.S. energy storage deployments in 2019 will be double those seen in 2018. Multiple large FTM projects will come online in 2020, leading to a tripling of the market from 2019 to 2020.