In Q3 2023, the U.S. energy storage market achieved a milestone, installing a record-breaking 7,322 megawatt-hours (MWh) of capacity, according to the US Energy Storage Monitor report by Wood Mackenzie and the American Clean Power Association (ACP). The grid-scale segment led the surge, experiencing a 27% quarter-on-quarter (QoQ) increase to reach 6,848 MWh, setting new records for both megawatts (MW) and MWh installed.
ACP Chief Policy Officer Frank Macchiarola emphasized the significant role of energy storage in the future energy mix, citing its growing deployment as essential for enhancing reliability and American energy security. The cumulative volume installed in Q1-Q3 2023 surpassed the total for the entire 2022, reaching 13,518 MWh.
However, the report notes that Q3 installations could have been higher if not for delays affecting around 80% of projects initially planned for the quarter. In the residential sector, there was a notable rebound from Q2, with a 29% QoQ increase in MW, led by California nearly doubling its installed capacity. On the other hand, the community, commercial, and industrial (CCI) storage segment saw a 7% QoQ decrease in installations, largely due to Massachusetts recording no community storage deployments.
Looking ahead, the U.S. storage market is projected to install approximately 63 GW between 2023 and 2027 across all segments, marking a 5% decline from the Q2 forecast. Challenges faced by the grid-scale segment include supply, permitting issues, and a backlog of applications in ISOs interconnection queues. The residential forecast increased by 4%, driven by California’s market picking up in Q3 after the passage of NEM 2.0. The CCI segment forecast declined 12% QoQ, mainly due to low installation volumes in Q1-Q3, but it is expected to double in 2024, especially as California introduces its community solar and storage program.
Wood Mackenzie’s analysis underscores the industry’s potential, emphasizing the need for a strong domestic supply chain, streamlined permitting, and evolving market rules to further accelerate storage resource deployment.
