How Distributed Battery Storage Will Surpass Grid-Scale Storage in the US by 2020
The utility push for rate reform may accelerate the adoption of behind-the-meter batteries.
In 2020, America’s energy storage market will likely surpass 1.6 gigawatts — making it 28 times bigger than it was in 2015.
The U.S. market in 2020 will be defined not just by higher volumes, but by diversity in project types. While large storage projects on the utility’s side of the meter currently dominate deployments, smaller batteries in homes and businesses on the customer’s side of the meter will become the biggest segment in terms of capacity in the next four years.
According to the latest figures from the U.S. Energy Storage Monitor produced by GTM Research and the Energy Storage Association, 187 megawatts of storage capacity was installed in the U.S. last year. That far outpaced behind-the-meter storage, which amounted to 34.4 megawatts.
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. (In energy terms, utility-scale projects will still represent 54 percent of the market, giving that sector a bit of an edge.)
That projected shift indicates that the nascent customer-sited battery segment is maturing. A broad range of manufacturers are bringing distributed systems to market; more solar and energy services companies are expanding into on-site battery offerings; financing options are improving; costs are coming down; and some utilities are starting to experiment with offering solar-plus-storage to their customers.
“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, GTM Research’s senior storage analyst.