By James Noble
March 12, 2015
The U.S. energy storage market is set for rapid expansion according to new research. By the end of 2015, energy storage installations in the U.S. are expected to grow from 62 MW to 220 MW, more than a 3-fold increase, and by 2019 the U.S. market is expected to be valued at $1.5 billion.
Almost 90 per cent of the most recent growth in energy storage happened at the utility scale, while just 10 per cent of activity occurring at customer sites. However, so-called “behind the metre” storage is expected to account for 45% of the U.S. market by 2019. Behind the metre refers to electricity produced and stored at a site and then fed to the grid or used on site, whereas, front of the metre refers to electricity produced on site but fed onto the grid before being used.
The storage installations themselves are geographically concentrated, with the vast majority of deployments located in the PJM power market (which consists of mid-Atlantic states to the Midwest) and California regional power markets. In terms of the modality of energy storage utilized, lithium-ion batteries make up roughly 70% of all deployments.
California’s status as a leader in pushing energy storage technologies is a result of aggressive renewable energy goals and greenhouse gas reduction mandates that would be hard to meet without more energy storage. As a result, the California Public Utilities Commission (CPUC) unanimously approved its mandate of requiring the state’s three investor owned utilities to add 1.3 gigawatts of energy storage by the end of the decade.
The burgeoning energy storage industry is beginning to resemble the residential solar business of ten years ago. In 2005, the costs of solar installations were relatively high and market mechanisms were being tested to evaluate the technology's value and effectiveness. Today, solar technology is cheap and one of the most cost-effective and utilized renewable energy resources in the marketplace.
Energy storage is unquestionably valuable to the renewable energy industry and power markets in general. This high level of interest will ensure that governments will continue to adjust regulations while companies experiment with different business models. Eventually, the right business model and regulatory environmental will make energy storage affordable for consumers and profitable for installers.
Photo Credit: Brian Talbot