A new report forecasts the use of energy storage systems, particularly batteries, nearly tripling in the U.S. this year.
According to the report, published by GTM Research and the Energy Storage Association, the forecasted growth of 186%, from 431 megawatt-hours (MWh) of storage to 1,233 MWh, compares with last year’s 27% increase. This can be owed in part to some large projects expected for 2017 being pushed to 2018. But the fact remains that the market for batteries in homes and businesses is finally taking off, according to GTM analyst Ravi Manghani, who said that part of the market logged growth of 79% last year.
Key drivers of growth in energy storage systems, which capture energy for later use, include much lower costs as well as state-level policies supporting the installation of batteries in homes, businesses and along the power grid. Storage system costs have fallen by about two thirds in the last five years, said Manghani. In addition, more states are requiring utilities to procure storage systems. Large systems for the utilities sector comprise the biggest segment of the market.
Another notable development is that more utilities are including an energy storage component in their solicitations for solar projects. Manghani expects this to become increasingly commonplace. “There is a big sort of shift in mind-set,” he said.
Batteries are seen as a viable solution to compensate for the intermittent nature of renewable energy sources such as wind and solar. According to Reuters, “Pairing big batteries with renewable energy projects improves reliability without creating climate-changing emissions, and more homeowners and businesses are looking to batteries for backup power and to capture the excess energy from rooftop systems to use when the sun is not shining.”
At present the energy storage market is small, generating just $300 million in value last year; however, overall market value is expected to exceed $1.2 billion by the end of 2019, according to the report. Growth in the use of batteries for electricity storage has already been a boon to manufacturers such as Tesla, LG Corp. and others, and batteries are on the radar of investors, regulators and the utilities sector.