US sets new quarterly record for energy storage after adding 5.597 GWh in Q2: ACP

The US set a quarterly record high of 5.597 GWh of energy storage added in the second quarter of 2023, with the grid-scale segment leading the way with its own record high, the American Clean Power Association, or ACP, announced Sept. 25.

There was a record-breaking 5.109 GWh of grid-scale energy storage added in the second quarter, up 172% quarter on quarter and up 5% from the previous record, according to the ACP's US Energy Storage Monitor report. However, 2 GW of grid-scale additions were pushed to later years.

"The energy storage market is on pace for a record year, as utilities and larger power users increasingly turn to storage to enhance the grid and improve reliability," John Hensley, ACP vice president of research and analytics, said in a Sept. 25 statement. "The market is on pace to nearly double annual installations despite supply chain challenges and interconnection delays and will continue to grow quickly in coming years."

The US is expected to add nearly 66 GW of energy storage by 2027, according to the report. Grid-scale energy storage is forecast to be the main driver going forwards, making up 83%, or 55 GW, of all additions.

However, the five-year market outlook decreased 12%, mostly in 2023 and 2024, according to ACP. Grid-scale declines were focused on supply challenges, as well as the backlog of applications in most grid operator interconnection queues that are preventing projects from moving through the development process.

Q2 breakdown

After several quarterly declines, there was a strong rebound in the second quarter, with projects that were previously delayed able to reach completion in the second quarter, according to ACP's Sept. 25 statement.

Even so, community, commercial and industrial installations added 107 MWh, which was higher than any quarter in 2022 but could not keep pace with the huge spike in first-quarter 2023 installations, resulting in a 53% quarterly decline, according to the report. However, the segment still rose 25% year over year in the second quarter.

Likewise, residential storage recorded its second-straight quarter of decline at 381.2 MWh, behind the 388.2 MWh recorded in the first quarter, according to the report. California has seen the biggest decline, decreasing 17% quarter over quarter and 37% year over year.

Battery pricing

Lithium-ion battery storage system pricing has declined more steeply alongside commodity prices, but are likely to slow in the second half of 2023, according to the report.

Battery prices peaked in late 2022, following a peak in lithium and other battery commodity prices in the fourth quarter of 2022. Lithium spot prices dropped quickly through the first quarter of 2023, and second-quarter system prices saw steeper declines as this price movement made its way into cells and modules. Commodity prices stabilized at the beginning of the second quarter and have stayed relatively flat.

Platts, part of S&P Global Commodity Insights, assessed seaborne lithium carbonate and lithium hydroxide at $24,000/mt CIF North Asia and at $27,000/mt CIF North Asia Sept. 25, down 68% and 67%, respectively, since the start of the year.

Seaborne lithium carbonate and lithium hydroxide prices hit peaks of $78,200/mt and $84,700/mt, respectively, in late November 2022.

Labor and balance of plant costs are still increasing due to various factors, according to the ACP. Transformer and inverter costs continue to trend upward due to high demand.