Ensnarled by supply-chain challenges since the onset of the pandemic, U.S. energy storage project developers are facing another year of significant delays, as indicated by a net 1,500-MW reduction in planned 2022 additions since May, according to S&P Global Market Intelligence data.

In aggregate, the in-service date of more than 5,000 MW of planned capacity tracked by Market Intelligence has been updated to a future year over the past three months. While that can consist of delays and data revisions, various stakeholders have flagged the potential for gigawatts of postponements.

Some of those delays could be rewarded. The Inflation Reduction Act, signed by President Joe Biden in August, includes valuable new and improved tax incentives for energy storage, some of which only take effect starting in 2023.

"There could be delays in projects that will qualify for higher tax credits if not placed in service until next year," said Keith Martin, a renewable energy tax expert and co-head of projects at Norton Rose Fulbright.

Delays mounting

Through Aug. 22, developers have completed 2,476 MW of large-scale power storage capacity in 2022, and plan to add another 6,145 MW by the end of the year, Market Intelligence data shows. Most of that is in the form of one- to four-hour lithium-ion battery systems.

It is "impossible to tell" how much construction activity could slow to take advantage of the new law, Martin said in an email. "Tax equity investors and lenders told us in June that 25% to 40% of projects were already in danger of slipping partly into 2023 due to tangled supply chains and labor shortages."

Texas and California continue to dominate developer plans, followed by Nevada, Arizona, New York and Hawaii.

In California, where developers had completed roughly 4,000 MW as Aug. 22, more than 13,000 MW more was under development, according to Market Intelligence data.

But timelines are fluid. A top energy adviser to Gov. Gavin Newsom recently said 40% of planned additions this year and next could be delayed. That does not include pushouts for the sake of qualifying for the new incentives.

Texas had 1,663 MW in operation and another 17,789 MW planned, the data indicates.

Q2 drop

Developers completed 785 MW in this year's second quarter, a decline of roughly 13% from a year ago, Market Intelligence data shows. That was also down from 925 MW in the first three months of 2022.

Among the completed projects are Texas-headquartered storage developer Jupiter Power LLC's 200-MW, one-hour Crossett Power Battery Storage project in Crane County, Texas, and Pacific Gas and Electric Co.'s 185.2-MW Elkhorn project in Monterey County, Calif., with four hours of energy storage capacity.

EDF Renewables Inc. in June completed a 50-MW/200-MWh battery array at the Maverick Solar 6 Project in Riverside County, Calif., with the output under contract with community choice aggregator CleanPowerSF.