In the last quarter of 2023, the US energy storage market achieved unprecedented deployment across various sectors, installing a total of 4,236 MW. This figure represents a doubling of installations compared to the previous quarter, as detailed in a recently published report from Wood Mackenzie and the American Clean Power Association’s (ACP). 

The latest ‘U.S. Energy Storage Monitor’ reveals that, for the first time, the grid-scale segment exceeded 3 gigawatts (GW) deployed in one quarter and nearly topped 4 GW. With 3,983 MW of new capacity additions, the quarter saw a 358% increase compared to the same period in 2022.

“The energy storage industry continues its incredible growth trajectory, with a record quarter helping drive home a banner year for the technology,” said John Hensley, ACP’s Vice President of Markets and Policy Analysis. “These additions bring with them critical benefits to our power grid. Energy storage has unique capabilities to address grid resilience, with the ability to serve as generation, load, and transmission. These benefits to the grid have been evident, especially in recent years, as storage has provided reliability and stability during critical moments like historic heatwaves. With a robust pipeline, the future for energy storage deployment is strong.”

Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team, added that “Q4 2023 was extremely strong for the US energy storage market, helped by easing supply chain challenges and system price declines. The quarter was commanded by deployments in the grid-scale segment, which recorded the highest quarter-on-quarter growth of any segment, ending the year with a 113% increase over Q3 2023. California continued to lead installations in both MW and MWh terms, closely followed by Arizona and Texas.”

How did different segments perform?

For the US residential segment, deployments reached 218.5 MW, which barely exceeded the previous quarterly installation record of 210.9 MW set in Q3 2023. According to WoodMackenzie and ACP, market gains in California were offset by a contraction in Puerto Rico, which follows a “roller-coaster” as incentive funds open and close.

The Community, Commercial, and Industrial (CCI) segment remained stagnant QoQ with 33.9 MW installed in Q4, where installed capacity was split relatively evenly between California, Massachusetts, and New York.

As outlined in the report, total deployments throughout 2023 across all sectors amounted to 8,735 MW and 25,978 MWh, marking an impressive 89% surge compared to 2022. Although it falls just short of doubling year-on-year, this extraordinary accomplishment was forecasted earlier in 2023 and closely mirrors the expectations set forth by Wood Mackenzie and ACP in previous reports.

Witte added taht “total grid-scale installations reached 7,910 MW and 24,000 MWh for 2023, which is a 98% increase over 2022 installations. Our updated five-year forecast now extends to 2028 and projects 59 GW of new capacity additions in that timeframe.”

According to the report, distributed storage exceeded 2 GWh in 2023, which is another first for the market. This was helped by a higher than average first quarter for the CCI segment, and over 200 MW of installations in Q3 and Q4 each in the residential segment.

Over the next five years, the report says the residential market will continue to boom, with more than 9 GW due to be installed. While the cumulative volume installed for the CCI segment is forecasted to be less than that, at 4 GW, the growth rate is over double, at 246%.