The research and development of new energy and renewable energy, and the search for advanced methods to improve energy efficiency have become the primary issue of common concern around the world.Energy storage systems are crucial to the further popularization of renewable energy. If you want to produce and use electric energy in a more environmentally friendly way, energy storage is an obstacle that must be overcome.

In what will likely be a repetitive, quarterly headline, the U.S. energy storage market has had its biggest first quarter yet. According to Wood Mackenzie and the U.S. Energy Storage Association’s (ESA) latest “U.S. Energy Storage Monitor” report, 910 MWh of new energy storage systems were brought online in Q1 2021 — an increase of 252% over Q1 2020.

Swinerton’s Mira Loma, California, energy storage project.

“It’s clear that the energy storage market is poised for tremendous growth in 2021 and beyond. The ‘Storage Decade’ is upon us, with the convergence of a transforming power and transportation system, and the growing need for decarbonization and resilience,” said Jason Burwen, ESA Interim CEO.

After a record-setting quarter for deployments in the final quarter of 2020, the pace of storage deployments slowed in Q1. However, despite the dip this quarter, the U.S. storage market still notched its third-highest megawatt-total for one quarter.

Looking ahead to the rest of 2021, deployments are expected to accelerate dramatically. Wood Mackenzie forecasts that nearly 12,000 MWh of new storage will be added in 2021, which is three-times the amount of new storage added in 2020.

One of the most significant storage market developments in Q1 was the introduction of a stand-alone storage investment tax credit (ITC) in Congress. If passed this year, a stand-alone storage ITC would result in a 20 to 25% upgrade to Wood Mackenzie’s five-year market outlook in megawatt terms.

“An extra 20 to 25% growth for the U.S. market over the next five years would supercharge an already fast-growing energy storage market,” commented Chloe Holden, Wood Mackenzie Energy Storage Analyst. “The front-of-the-meter (FTM) segment would see the largest incremental growth, with an extra 6 GW of capacity expected through 2025, which is 25% of our base-case market forecast. Without the stand-alone storage ITC, we forecast that the FTM segment will add 3,674 MW in 2021 and 6,915 MW in 2026.”

As noted in the report, the U.S. residential storage market set yet another quarterly record in Q1 2021. The residential market has grown for nine quarters in a row and broke 100 MW deployed in a single quarter for the first time in Q1 2021.

“Backup power to complement rooftop solar systems has become the key selling point for residential battery systems in all U.S. markets,” said Holden. “Although other states also have growing markets, California will continue to lead the residential segment by a significant margin through 2026.”

The non-residential market (commercial and community-scale) is not seeing the same growth as other sectors, with between 25 and 35 MW of new projects installed in each of the last five quarters.

The report also notes that the FTM interconnection queue now sits at over 200 GW. Though most projects in the queue will not come online, the queue is the largest it has ever been and is a testament to the rapid growth of the U.S. FTM storage market. There is a clear trend of increased geographic diversity of interest in FTM projects, with a surge of interconnection queue requests sitting outside of incentivized markets.

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