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After speed bump, US energy storage set for 'breakout 2018,' analyst predicts

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After speed bump, US energy storage set for 'breakout 2018,' analyst predicts

After hitting a speed bump in 2017, U.S. energy storage installations are poised to grow 15-fold through 2023 to an annual market of 3,327 MW, worth $3.77 billion, GTM Research predicted in a new report.

Deployments dropped to 215 MW in 2017 from 231 MW in 2016, coming in under the research firm's prior estimate of 295 MW as developers pushed several major project completions from the fourth quarter to early 2018.

In terms of power rating, installations completed in the fourth quarter of 2017 totaled 62 MW, a 56% decline from a year ago and also well below the fourth quarter of 2015, the report showed. Behind-the-meter batteries installed at homes and businesses, often coupled with on-site solar, accounted for 55% of storage deployed in the fourth quarter of 2017, up from 27% a year earlier. Lithium-ion batteries accounted for nearly 99% of fourth-quarter storage additions.

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Overall, California led the way in 2017, with 51.6 MW of behind-the-meter storage and 43.5 MW of storage on the utility side of the meter. Texas, however, led grid-scale storage additions with 51.8 MW.

A unit of Wood Mackenzie, GTM Research expects annual energy storage deployments to more than double in 2018 and "almost cross the 1 GW threshold in 2019," while exceeding $1.2 billion in annual value next year, according to the report, released March 6. In terms of energy rating, the research firm expects more than 1,000 MWh will be installed this year, roughly the same volume as was installed between 2013 and 2017.

"We're going to have to strike the word 'nascent' from our vocabularies when describing the U.S. energy storage market," Ravi Manghani, GTM Research's director of energy storage, asserted in a press release. "Falling costs and favorable policies will be among the core drivers of the market's breakout 2018."

Kelly Speakes-Backman, CEO of the Energy Storage Association, cited the Federal Energy Regulatory Commission's recent "landmark decision" on eliminating barriers that keep batteries and other energy storage technologies from participating in wholesale energy markets as a key policy that could "lay the groundwork" for storage to be compensated for its full value. The group is targeting installation of 35,000 MW of storage by 2025. A recent report from The Brattle Group said the FERC order could supercharge the storage market to 50,000 MW in the next decade.