US Energy Storage Facing Headwinds: Report

US Energy Storage Facing Headwinds: Reportby Patrick Zemanek

The US posted its strongest second quarter for grid-scale energy storage growth to date, but the sector is wrestling with fallout from supply chain and policy issues, according to a new report

The US installed 1,170MW of grid-scale energy storage in April-June, making it the strongest second quarter to date for the sector, trade group American Clean Power Association (ACP) and consultant Wood Mackenzie said today in their quarterly update.

But factors including supply chain disruptions, transportation issues and interconnection queue challenges delayed or cancelled more than 1,100MW of grid-scale storage scheduled to begin operating during the three-month period. Developers are still scheduled to bring 709MW of the delayed capacity on line before the end of the year.

Within the grid-scale segment, solar-and-storage expectations fell as a consequence of federal policies disrupting the solar supply chain. While President Joe Biden has waived until June 2024 any tariffs arising from the US Department of Commerce's investigation into solar imports from Cambodia, Malaysia, Thailand and Vietnam, the solar sector is now struggling with the Uyghur Forced Labor Prevention Act, which restricts goods imported from China's Xinjiang Uyghur Autonomous Region from entry into the country under the assumption they were made with forced labor.

Wood Mackenzie energy storage senior analyst Vanessa Witte said the US grid-scale storage pipeline would "face rolling delays into 2023 and beyond."

Grid-scale projects are mostly larger than 1MW, and the category excludes systems participating in community-scale programs.

Residential storage growth set a record for any quarterly period in April-June with 154MW added. While demand in the segment is climbing, supply shortages and higher prices have limited developments.

Community storage growth during the second quarter remained lower than other areas, with only 26.3MW added, a consequence of the procurement issues blending with "lackluster" economics for installations in the segment.

Despite ongoing challenges, the storage industry will benefit from the recently enacted Inflation Reduction Act, which features investment tax credit (ITC) extensions for solar and a new standalone storage ITC.

The US is now expected to add 59,200MW of new storage capacity between 2022-26.

The US has installed 6,471MW of grid-scale battery storage through the second quarter of 2022, according to ACP.

(, 15 September 2022)

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