As U.S. demand for energy storage booms and the customer-side storage market matures, behind-the-meter installations in homes and commercial settings could become more popular than utility-scale systems by the end of the decade.
That’s the conclusion of the latest U.S. Energy Storage Monitor, released last week by Greentech Research and the U.S. Energy Storage Association.
“There are two big factors at play: rate changes and fees pushed by utilities concerned about net metering, and more sophisticated market rules that allow distributed batteries to play in the market,” said Ravi Manghani, senior storage analyst at GTM Research.
“I would certainly agree that residential demand charges and other rate changes appear to be catalysts for storage and solar-plus-storage,” said energy utility specialist Alexander Pischalnikov of PA Consulting Group.
Behind-the-meter systems only accounted for 34.4 of the 187 megawatts of new storage capacity installed in the U.S. last year, Greentech Media reports. “By the end of the decade, however, distributed batteries will edge out centralized systems in front of the meter. Behind-the-meter batteries in homes and commercial sites will amount to 841 megawatts of capacity; front-of-the-meter storage will amount to 821 megawatts of capacity.”
The “big unknown,” writes Greentech Managing Editor Stephen Lacey, is how utilities will react to this shift. “Will they see self-consumption as a threat to their business? Or will they treat distributed batteries like a resource that can help balance the grid when aggregated? It will likely be a combination of both.”