The US energy storage market achieved historic milestones in Q3 2024, setting a new record with 3,806 megawatts (MW) and 9,931 megawatt-hours (MWh) of storage installed across all segments—a dramatic 80% increase in MW compared to Q3 2023, according to the latest US Energy Storage Monitor report by the American Clean Power Association (ACP) and Wood Mackenzie.

Source: American Clean Power

Grid-scale storage drives growth in Texas and California

The grid-scale sector led the charge with 3,431 MW and 9,188 MWh installed in Q3, setting a new third-quarter benchmark. Texas tripled its installations compared to Q2, adding nearly 1.7 GW, while California deployed nearly 6 GWh, emphasizing its focus on longer-duration energy storage solutions.

Other states, including Arizona, Colorado, Florida, and Vermont, also contributed to Q3’s impressive grid-scale installations, underscoring the nationwide push for storage deployment.

John Hensley, Senior VP of Markets and Policy Analysis for ACP, highlighted the critical role of energy storage:

“We are seeing the energy storage industry fill a real need across the country to provide reliability in an affordable and efficient manner for communities. With 64 GW of new energy storage expected in the next four years, the market signal is clear: energy storage is a critical component of the grid moving forward.”

Residential storage sets all-time record

The residential energy storage market also reached new heights in Q3, with 346 MW installed—a 63% quarter-over-quarter growth. California, Arizona, and North Carolina led this segment, recording growth rates of 56%, 73%, and 100%, respectively, despite supply shortages for residential batteries.

Community-scale, commercial, and industrial (CCI) installations were steady, with 29 MW installed—a slight 4% dip compared to the same quarter last year.

Future outlook: continued growth with challenges ahead

Both grid-scale and residential sectors are forecast to drive the energy storage market, with grid-scale installations projected to surpass 63 GW by 2028. Residential storage is expected to reach 10 GW during the same period.

Nina Rangel, senior research analyst at Wood Mackenzie, emphasized the industry’s robust trajectory:

“Storage installations will grow 30% in 2024, signaling the industry’s strongest year yet. However, maintaining this pace will be challenging, with growth rates moderating to an annual average of 10% from 2025 to 2028 due to development constraints.”

Wood Mackenzie’s Global Head of Storage, Allison Weis, noted potential uncertainties with the new Presidential administration, including possible changes to tax credits and increased tariffs. Weis added:

“While opportunities exist for domestic manufacturers, major shifts in tax incentives or tariffs could impact new project development and slow the industry’s momentum.”

The road ahead for energy storage

As the US grid evolves to meet rising energy demands, energy storage continues to play a pivotal role in ensuring grid reliability, supporting economic growth, and enabling the transition to cleaner energy. With record-breaking installations in Q3 and strong projections for future growth, the US energy storage market remains a vital driver of the nation’s energy future.