US grid-scale storage installations double in Q1 on "staggering" decline in system prices

New report by Wood Mackenzie and American Clean Power Association cites declines in lithium prices and Chinese oversupply

A Spearmint Energy BESS project in Texas
A Spearmint Energy BESS project in TexasPhoto: Spearmint Energy

The US installed a record 993MW/2.95GWh of grid-scale energy storage capacity in the first quarter, more than double a year earlier, aided by a 39% decline in system prices, according to latest data from Wood Mackenzie and American Clean Power Association (ACP).

Residential installations rose 48% to 252.4MW and those for community, commercial, and industrial (CCI) declined 41% to 33MW. Total first quarter additions were up 84% versus a year earlier.

The grid-scale segment, which dominates sector activity followed by residential and CCI, was led by fast-growing Nevada, 38% of total capacity, and Texas (35%).

Nevada’s entire capacity gain was attributable to Primergy’s $1.2bn solar-paired Gemini energy storage project in the Mojave Desert. Texas installed 12 storage projects. Clean energy investment is booming in both Nevada and Texas which rank third and fourth in economic growth among all 50 states.

“The rapid growth of the energy storage industry comes at a critical time, providing a solution to growing energy demand and increasingly variable weather conditions that are placing added stress on the grid,” said John Hensley, vice president of markets and policy analysis at ACP. “A strong start to 2024 sets expectations high for the remainder of the year.
The “staggering” decline in storage system prices from the cell-to-block level resulted from declines in lithium prices and dynamics such as China oversupply and “extreme competition,” according to the Woodmac-ACP report, US Energy Storage Monitor, Q2 2024.

OEMs and integrators were also dealt a win with recently released domestic content guidance that changed the reporting structure to qualify for a 10% tax credit adder, allowing for developers to declare their eligibility without use of manufacturing costs from the OEM directly.

Looking ahead, the grid-scale segment in 2024 will see a 45% year-on-year additions increase to 11.1GW/31.6GWh, bringing total cumulative volume in the next five years to 62.6GW/219GWh, according to Woodmac.

“Growth flattens in 2025 and 2026 as project capacity is pushed into later years of the forecast largely due to early-stage development challenges such as permitting and siting, and interconnection queue timelines,” notes the report.

The grid-scale pipeline totaled 426GW on 31 March.

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Published 18 June 2024, 16:31Updated 18 June 2024, 16:31
AmericasUSWood MackenzieACPAJoe Biden