The U.S. energy storage market saw significant growth in the second quarter of 2024, with grid-scale energy storage leading the charge. A total of 2,773 MW and 9,982 MWh were deployed in this segment, marking a new record for the quarter. This growth was reported by the American Clean Power Association (ACP) and Wood Mackenzie in their latest U.S. Energy Storage Monitor report. Overall, the market deployed 3,011 MW and 10,492 MWh of energy storage across all segments, making it the second-highest quarter on record, following Q4 2023, when 13,437 MWh were installed.
The report highlighted that every segment of the energy storage market experienced growth in Q2 compared to the same period last year. Community energy storage installations rose by 61%, reaching 87 MWh, while residential storage increased by 12%, totaling 423 MWh. California, Arizona, and Texas were the major contributors, accounting for 85% of the total installations during this period.
John Hensley, Senior Vice President of Markets and Policy Analysis for ACP, noted that energy storage is becoming a critical part of the U.S. power grid. “Energy storage is delivering a more resilient and affordable grid, providing cost-effective and reliable solutions to meet the growing energy demand, and addressing challenges from extreme weather events,” he said. However, Hensley emphasized the importance of overcoming development challenges such as lengthy interconnection queues, permitting, and siting to maintain the growth momentum.
Vanessa Witte, a senior analyst with Wood Mackenzie’s energy storage team, said that grid-scale energy storage was the main driver of growth in the second quarter. She also pointed out that while the community segment performed well, the residential segment showed slower progress. California, which had been leading residential energy storage growth, saw its rapid expansion slow down. Additionally, installations in Hawaii and Puerto Rico remained low due to changes in incentive programs.
Looking ahead, Wood Mackenzie’s five-year outlook for the U.S. energy storage market projects a 42% growth in total storage deployments between 2023 and 2024. However, beyond 2024, growth will stabilize, with an average annual increase of 7.6% from 2025 to 2028. By the end of 2024, the industry is expected to deploy 12.7 GW and 36.7 GWh of storage across all segments.
The grid-scale segment is expected to increase by 32% year-over-year, with 11 GW and 32.7 GWh deployed by the end of 2024. Over the next five years, grid-scale installations are expected to total 62 GW. Distributed storage will also see substantial growth, with 12 GW expected to be deployed between 2024 and 2028. The residential segment will account for 80% of distributed storage capacity, with 10 GW projected during this period. The community segment is expected to add 2.5 GW of storage, though this is a slight reduction from previous forecasts.
Witte also highlighted that while the industry is growing, certain challenges remain. She noted that growth in 2025 and 2026 may slow as some project capacities are delayed. Additionally, the community segment faces difficulties due to the complexity of developing projects and limited financial value streams.
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