The energy storage market is poised for substantial growth over the next five years, with installed capacity this year expected to more than triple to 220 MW from last year’s 62 MW.
A recent report from GTM Research and the Energy Storage Association, ‘U.S. Energy Storage Monitor,’ projected that the market will grow from $128 million last year to $1.5 billion by 2019, when more than 800 MW will be installed.
Moreover, non-utility storage – residential and non-residential – will grow from just 10% of installed capacity last year to 45% over the same period.
This is a bullish forecast for downstream residential vendors identified in the report, such as Schneider Electric, Outback Power, Sunverge, and Solar City. (Related: Middle East Oil Addiction Could Spell Disaster)
Across all categories, including utility, Tesla looms large, along with established players like ABB and Bosch. Makers of Lithium-ion batteries, which accounted for 70% of installed energy storage capacity last year, include Tesla again, as well as Panasonic, Samsung SDI, Hitachi and several others.
The 62 MW installed last year marked a 40% gain from 44 MW in 2013, and included 180 individual installations, the report said. A short-term lull in utility projects next year will mean a lower rate of growth for that year, but then the market is expected to grow steadily through 2019. (Related: Can Utilities Survive 21st Century Energy Market?)
Most of the non-utility, or ‘behind-the-meter’ growth in 2014 came in the non-residential sector – commercial, military, education or nonprofit. Since much of that came in the fourth quarter, along with a surge in residential installations, the report authors expect 2015 to be a ‘breakout year’ for behind-the-meter storage.
So far there has been a high degree of geographic concentration in energy storage deployment, the report says, attributing this to the right combination of policies, regulatory environment and wholesale market designs.
While the PJM market has been the best so far for deployment by utilities, new opportunities are opening up in the rest of the country. (Related: The U.S. Will Spend $5 Billion On Energy Research In 2015 – Where Is It Going?)
In California, for instance, the Californian Public Utility Commission is mandating 1.3 GW of storage capacity by 2020. The state of Washington awarded $15 million to utilities for storage demonstration projects. The Electric Reliability Council of Texas, which manages the deregulated market in 75% of the state, is revamping its ancillary service market to encourage resources such as storage. Hawaii is looking at three battery storage projects on the basis of an RFP for projects of 60 MW to 200 MW.
California, which ranks second in ‘front-of-the-meter’ capacity, is No. 1 in behind-the-meter projects. Its Self-Generation Incentive Program for distributed energy resources will continue to spend $83 million a year through 2020. Massachusetts awarded $26 million to micro-grid projects, many of which include battery storage. In New York, Con Edison is soliciting 85 MW of load management, including battery and thermal storage.
In the downstream value chain for energy storage, the report identifies several categories of companies among the three market segments with market leaders in each category. These are power electronics vendors, battery management system vendors, energy storage system vendors and energy storage system developers.
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