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The U.S. energy storage market achieved a remarkable milestone in the second quarter of 2023, with the addition of 5,597 megawatt hours (MWh) of capacity, marking a new quarterly record. This achievement was revealed in the latest U.S. Energy Storage Monitor report by Wood Mackenzie and the American Clean Power Association (ACP).
Notably, the grid-scale segment led this surge, setting a new record with 5,109 MWh added during Q2, surpassing the previous record set in Q4 2021 by 5%. The grid-scale segment’s remarkable growth contributed to a staggering 172% quarter-over-quarter increase in the energy storage market. California played a pivotal role in this expansion, contributing 738 megawatts (MW) and claiming a 49% share of the installed capacity.
John Hensley, ACP’s VP of Research and Analytics, emphasized the growing reliance on energy storage to enhance grid reliability, forecasting a record-breaking year for the energy storage market despite supply chain constraints and interconnection delays.
Wood Mackenzie’s five-year forecast from 2023 to 2027 underscores the grid-scale segment’s continued dominance, accounting for 83% of total installations or 55 gigawatts (GW).
Vanessa Witte, a senior analyst at Wood Mackenzie, noted that the market rebounded significantly in Q2 after facing consecutive quarterly declines primarily due to supply chain challenges. However, not all projects in the projected pipeline materialized, with over 2 gigawatts (GW) pushed back.
In contrast, community, commercial, and industrial (CCI) installations saw a quarterly decline of 53%, with 107 MWh added, though they remained 25% higher year-over-year.
Residential storage, on the other hand, experienced its second consecutive quarterly decline, with 381.2 MWh added in Q2, slightly lower than Q1’s 388.2 MWh. California witnessed the most substantial decline, down 17% quarter-over-quarter and 37% year-over-year.
Despite these fluctuations, a positive outlook for residential storage remains, with a projected total of 8.0 GW in 2027. However, the CCI segment has faced challenges in meeting growth projections, leading to a 28% downgrade in its five-year growth forecast to 3 GW.