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Storage deployment grew across all segments and is projected to increase another 25% by 2025, according to Wood Mackenzie. Across all segments, including residential, commercial and industrial, and utility-scale, energy storage saw year-over-year growth in deployment through 2024. The energy storage industry has rapidly expanded to meet the needs of today and deliver reliability and cost savings for American communities, playing a critical role in reinforcing and balancing low-cost renewable energy and improving the efficiency of thermal power plants, said Noah Roberts, vice president of energy storage at American Clean Power. More than 12.3 GW and 37.1 GWh of energy storage will be deployed in the US in 2024, according to Wood Mackenzie and the American Clean Power Association (ACP). This represents growth of 33% and 34%, respectively, compared to the 2023 totals. Grid-scale storage deployments alone are expected to reach 13.3 GW by 2025. Across all segments, Wood Mackenzie expects 15 GW of storage deployments, growing another 25% from the record year of 2024. “Energy storage has entered a new phase of growth with its first year of double-digit deployment. We’re seeing increasingly diversified industry growth across geographic regions, with New Mexico, Oregon, and Arizona accounting for 30% of storage capacity additions in the fourth quarter of 2024,” said Kelsey Hallahan, senior director of market intelligence at ACP. Grid-scale storage saw a slowdown in deployment in the fourth quarter, down 20% year-over-year. According to Wood Mackenzie, this was primarily due to the delay of 2 GW of late-stage projects from the fourth quarter of 2024 to the fourth quarter of 2025. Texas and California continued to lead the grid-scale storage market, accounting for 61% of total installed capacity in the fourth quarter. The remaining 39% was installed in 13 states, according to the report. Hallahan said that with a strong project pipeline and expected sustained growth, the U.S. is on track to deploy more than 100 GW of grid-scale storage by 2030. Residential energy storage had a strong growth year, deploying 1.25 GW in 2024, 57% above 2023 totals. Residential battery installers had a record quarter in Q4 2024, up 6% quarter-over-quarter as they deployed 380 MW. Community, commercial, and industrial storage also grew year-over-year, increasing 22% to 145 MW. According to the report, California, Massachusetts, and New York led the way, with a combined 88% of installed capacity. Uncertainty about the future Due to political uncertainty, growth is likely to slow this year and beyond, says Allison Feeney, research analyst at Wood Mackenzie. Growth will recover toward the end of the decade, with a forecast of 81 GW of total installations between 2025 and 2029. A key uncertainty monitoring the sector is whether the tax incentives will continue over the next decade. Allison Weis, global head of warehousing at Wood Mackenzie, said its still too early to predict the outcome of the Inflation Reduction Act incentives over the next year. According to Weis, the combination of new tariffs on China and other countries and maintaining the 45-times domestic content incentive would make U.S.-made batteries more competitively priced, but prices are expected to rise. Whats more, domestic suppliers arent yet prepared to meet the rapid demand, he said. If rising prices are combined with the phase-out of the Investment Tax Credit starting in 2028, our five-year deployment forecast could be reduced by as much as 19 percent, Weiss said. |
