A new report shows that battery storage is poised for a 10-year “growth spurt,” with potential for U.S. government policy to push the industry’s expansion even further.
“The combined capacity of U.S. battery storage projects could grow by 10 times beyond the 2019 figure between 2021 and 2023 to contribute 10,000 MW to the grid,” writes Utility Dive, reporting on a recent study by the U.S. Energy Information Administration (EIA). “But according to the Energy Storage Association (ESA), accelerated growth within the industry over the last year could push that projection even higher.”
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The report lists regional market patterns, expanding small-scale battery storage capacity, lower installation and operating storage costs, and more direct support from solar power as main drivers for the expected growth.
ESA interim CEO Jason Burwen told Utility Dive that 2020 “was a huge year for the industry,” creating a “hockey stick moment” in an overall path of steady growth. The EIA report is based on 2019 data, so energy storage is expected to exceed those already high estimates.
In the one year between 2019 and 2020, U.S. battery deployment tripled—and now the country “is set to triple or even quadruple battery deployment in 2021 so far,” Utility Dive writes. The lower costs increase storage capacity at each facility, which also increases how long battery systems can last when operating at maximum power.
While the report explains the spurt as resulting from several combined factors, it identifies the falling cost of battery storage as the main influence. Costs dropped 27% per year between 2015 and 2019, and storage is “increasingly paired with solar installations to take advantage of investment tax credits,” explains Utility Dive.
Government policy such as stand-alone incentives for storage projects could further amplify growth, Burwen noted. Other supportive actions could include facilitating new battery installation projects by accelerating renewable energy production at the federal and state level.
The battery storage industry will also benefit from tightening emissions standards from energy production, said EIA energy analyst Vikram Linga. Utility Dive adds that “utilities’ need for a low-emission alternative to gas peaking plants will increase in step” with a rising share of energy from renewables in the grid.