The U.S. energy storage market reached a new deployment high in the final quarter of 2023, with 4,236 MW installed — a 100% increase from Q3, according to a new report from Wood Mackenzie and the American Clean Power Association.
The latest “U.S. Energy Storage Monitor” report shows that grid-scale energy storage deployment exceeded 3 GW installed in one quarter for the first time. With 3,983 MW of new capacity additions, the quarter saw a 358% increase compared to the same period in 2022.
“The energy storage industry continues its incredible growth trajectory, with a record quarter helping drive home a banner year for the technology,” said John Hensley, ACP’s Vice President of Markets and Policy Analysis. “These additions bring with them critical benefits to our power grid. Energy storage has unique capabilities to address grid resilience, with the ability to serve as generation, load, and transmission. These benefits to the grid have been evident, especially in recent years, as storage has provided reliability and stability during critical moments like historic heatwaves. With a robust pipeline, the future for energy storage deployment is strong.”
Credit: NextEra Energy
For the U.S. residential segment, deployments reached 218.5 MW, which just exceeded the previous quarterly installation record of 210.9 MW set in Q3 2023. Market gains in California were offset by a contraction in Puerto Rico, which follows a “roller-coaster” as incentive funds open and close.
The community, commercial and industrial (CCI) segment remained stagnant QoQ with 33.9 MW installed in Q4, where installed capacity was split relatively evenly between California, Massachusetts and New York.
According to the report, total deployments in 2023 across all segments reached 8,735 MW and 25,978 MWh, representing an 89% increase over 2022. While just shy of doubling year-on-year, this record-breaking achievement was projected earlier in 2023 and very much aligns with Wood Mackenzie and ACP’s expectations outlined in previous reports.
“Total grid-scale installations reached 7,910 MW and 24,000 MWh for 2023, which is a 98% increase over 2022 installations. Our updated five-year forecast now extends to 2028 and projects 59 GW of new capacity additions in that timeframe,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team.
According to the report, distributed storage exceeded 2 GWh in 2023, which is another first for the market. This was helped by a higher than average first quarter for the CCI segment, and over 200 MW of installations in Q3 and Q4 each in the residential segment.
Over the next five years, the residential market will continue to boom, with more than 9 GW due to be installed. While the cumulative volume installed for the CCI segment is forecasted to be less than that, at 4 GW, the growth rate is over double, at 246%.
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