US set to lead utility-scale storage market in record year

From pv magazine USA

The global utility-scale energy storage market is on track for a record year in 2021, with the United States continuing to lead the way.

According to a new report from IHS Markit, global utility-scale energy storage installations are set to surpass 10 GW for the first time this year. That’s more than double the 4.5 GW installed in 2020.

Notably, the report does not include smaller commercial or residential energy storage installations. However, the deployment of such projects has also risen in line with distributed solar adoption.

“The energy storage industry will begin significant multiyear growth in 2021, continuing until 2030, as the technology begins to form a core component of power grids in developed markets and new opportunities in developing markets continue to emerge;” said George Hilton, senior analyst of clean technology at IHS Markit.

The report said the United States will account for about 50% of the global utility-scale energy storage market this year. IHS Markit said it expects the country to continue to extend its dominance of the global market. It will likely gain market share until 2023, when the project pipeline is expected to shrink.

However, the report noted that aggressive decarbonization plans in mainland China will lead to rapid growth in the region starting in 2025. This will drive the Asia-Pacific region to account for 44% of global annual installations by 2030.

In Europe, a 70% increase in annual installations will be realized this year. The technology will begin to be used more widely to keep grid frequency stable and reduce the intermittency of renewable energy.

“The global market for energy storage is maturing rapidly,” said Hilton. “The number of countries where annual installations exceed 100 MW will increase from nine in 2020 to 17 in 2022. The three biggest contributors to this growth will be the United States, mainland China, and Australia, which are together forecast to supply 4.5 GW of capacity in 2021.”

IHS Markit also said that solar+storage installations are emerging as a major growth factor for the overall market. Solar+storage installations are capitalizing on recent policy changes in the United States, such as the extension of the solar Investment Tax Credit (ITC). This means that energy storage projects that are co-located with solar will continue to benefit from a reduced tax burden through to 2025.

According to the report, 1.3 GW of tenders have been announced or awarded globally for utility-scale storage systems co-located with solar PV over the past six months. Combined with the impact of the U.S. ITC, IHS Markit said it predicts that 3.8 GW of utility-scale solar+storage will be completed this year. That’s a big leap compared to 0.9 GW in 2020. Of the expected 3.8 GW, 2.5 GW will be in the United States.