Dive Brief:

The U.S. energy storage market interconnected a total of 760.3 MWh last year, an increase of 44.9% over 2017, according to a new report published Tuesday by the Smart Electric Power Alliance (SEPA).

Utility-supply storage remained the industry's largest market segment at 394.8 MWh and saw a double-digit growth of 11.3% year over year, the report found. Residential storage deployments jumped 500%, while non-residential storage grew 34.9% in 2018.

The country’s cumulative energy storage capacity reached nearly 2 GWh last year as the price of lithium-ion batteries has declined by almost 73% since 2013, SEPA said in its report.

Dive Insight:

The streak of good news for the energy storage industry keeps on going. Last week, BloombergNEF (BNEF) predicted in its latest report that global energy storage deployment will increase 122-fold over the next two decades to 1,095 GW/2,850 GWh by 2040. This was preceded by Tesla’s announcement of record deployment numbers for its energy storage products, Powerwalls and Powerpacks, during the second quarter of 2019. SEPA's analysis merely continues the trend positive developments in the industry.

“Energy storage deployment are accelerating, driven by increasingly compelling economics and favorable state policies and residential programs,” Mac Keller, co-lead author and research associate at SEPA, said in a statement.

California, Hawaii and Vermont spearheaded last year’s growth in the residential storage market, the report showed. The three states combined interconnected 147 MWh of storage across more than 10,000 residential battery storage systems in 2018. Given that the residential storage market added a total of 175.5 MWh last year, the three states accounted for almost 84% of all interconnected residential storage capacity.

On the non-residential storage side, the United States added 189.9 MWh of capacity, while utility-scale deployment of storage was dominated by investor-owned utilities (IOUs), the report showed. IOUs were responsible for 64.3% of utility-scale energy storage deployment in 2018, with a total of 488.6 MWh.

"Beyond traditional back-up generation, storage is able to provide ancillary functions, ramping, smoothing, peaking and baseload generation services to meet the demands of an increasingly diversified and distributed," Keller said. "Based on these expanded applications, the storage market is primed for continued growth."

For its 2019 Utility Energy Storage Market Snapshot, the authors relied on interconnecting data and market insights from 211 electric utilities, which service approximately 56% of all customers in the country. Of the more than 200 utilities that responded in the survey, 94 said they had at least one storage system installed in their service territory by Dec. 31, 2018, and a further one quarter deployed their first storage project last year.

Meanwhile, SEPA also unveiled the Top 10 U.S. utilities that interconnected the most new energy storage capacity in their service territory.

By interconnecting 154.3 MWh of energy storage in 2018, Southern California Edison once again took the top spot on the annual megawatts list, while Hawaii-based Kauai Island Utility Cooperative defended its top spot on the annual watt-hour per customers (Wh/C) ranking with the interconnecting 3,037.6 Wh/C.