The U.S. energy storage market experienced remarkable growth in the second quarter of 2024, with grid-scale energy storage leading the way. A total of 2,773 MW and 9,982 MWh were deployed in this segment, setting a new record for the quarter, as reported by the American Clean Power Association (ACP) and Wood Mackenzie on October 4, 2024.
Overall, the market deployed 3,011 MW and 10,492 MWh of energy storage across all segments, marking the second-highest quarter on record, following Q4 2023, when 13,437 MWh were installed. Every segment of the energy storage market saw growth compared to the same period last year, with community energy storage installations rising by 61% to 87 MWh, and residential storage increasing by 12% to 423 MWh. California, Arizona, and Texas contributed significantly, accounting for 85% of total installations during this period.
John Hensley, Senior Vice President of Markets and Policy Analysis for ACP, emphasized the critical role of energy storage in enhancing the resilience and affordability of the U.S. power grid. He noted, “Energy storage is delivering a more resilient and affordable grid, providing cost-effective and reliable solutions to meet the growing energy demand, and addressing challenges from extreme weather events.” However, he also pointed out the need to overcome development challenges such as lengthy interconnection queues, permitting, and siting to sustain growth.
Vanessa Witte, a senior analyst at Wood Mackenzie, highlighted that grid-scale energy storage was the primary driver of growth in the second quarter. While community energy storage performed well, the residential segment showed slower progress, particularly in California, which previously led in residential energy storage growth. Installations in Hawaii and Puerto Rico remained low due to changes in incentive programs.
Looking forward, Wood Mackenzie projects a 42% growth in total storage deployments between 2023 and 2024, with the industry expected to deploy 12.7 GW and 36.7 GWh of storage across all segments by the end of 2024. The grid-scale segment is anticipated to increase by 32% year-over-year, totaling 11 GW and 32.7 GWh by the end of 2024. Over the next five years, grid-scale installations are expected to reach 62 GW, while distributed storage is projected to add 12 GW during the same period.
Witte also noted that while the industry is growing, challenges remain. Growth in 2025 and 2026 may slow due to delays in project capacities, and the community segment faces difficulties related to project development complexity and limited financial value streams.