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According to the latest “US Energy Storage Monitor” report from Wood Mackenzie and the U.S. Energy Storage Association (ESA), 2,156 MWh of new energy storage systems were brought online in Q4 2020. This is an increase of 182% from Q3 2020, making Q4 the new record quarter for U.S. storage.

As prices fall and barriers to storage deployment are eroded, front-of-the-meter (FTM) storage is taking off in the United States. Four out of every 5 MW deployed in Q4 were FTM storage. The segment contributed 529 MW out of the total 651 MW of storage deployed in Q4. California saw the lion’s share of Q4 FTM deployments, according to the report.

At 90.1 MW deployed, residential storage projects made up 14% of the megawatt total for Q4. After gradual growth in deployments over the first three quarters of 2020, Q4 saw a notable residential spike, driven in large part by homeowner interest in California.

Massachusetts led the non-residential segment in Q4, which is growing more slowly than the other two U.S. storage segments and deployed 76.5 MWh during the quarter. California and Hawaii also saw several new projects come online.

In 2020 overall, 1,464 MW/3,487 MWh of new storage came online in the United States. 179% more storage was added in 2020 than in 2019 in megawatt terms. The U.S. storage market will add five-times more megawatts of storage in 2025 than was added in 2020, with FTM storage continuing to contribute between 75-85% of new megawatt-capacity each year.

“2020 is the first year that advanced energy storage deployments surpassed gigawatt scale – a tremendous milestone on the path to our aspiration of 100 GW by 2030,” said Jason Burwen, U.S. Energy Storage Association Interim CEO. “With continuing storage cost declines and growing policy support and regulatory reform in states and the federal government, energy storage is on an accelerating trajectory to enable a resilient, decarbonized, and affordable electric grid for all.”

Q4 was the most eye-catching quarter to date for the residential market. California contributed most residential storage deployments in 2020, and Hawaii was also a very active market, while states in the Northeast, the Midwest, the mid-Atlantic and the Southeast are forecast to see growth over the next few years.

“Battery backup is already becoming somewhat of a contested concept in the industry, as it can have different meanings depending on the installer or vendor,” said Chloe Holden, Wood Mackenzie Research Analyst. “But the ability of solar + storage to provide backup is increasingly driving sales even in markets without additional incentives, particularly states that suffer from regular power outages. We expect an uptick in home battery sales in Texas in the aftermath of February’s devastating outages.”

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