Continuing the heels of record breaking year, it was obvious that energy storage in 2016 is on track to break through last year’s record.
The year-over-year increase will likely not be as dramatic as 2015’s 243% increase over 2014, but several developments in 2016 show that the storage market is developing in ways that could clear a path for accelerated growth in future years.
In its third quarter, the U.S. Energy Storage Monitor, GTM Research and the Energy Storage Association said they expect the U.S. energy storage market to grow to 260 MW in 2016, up from 226 MW in 2015.
However, it is not just the size and number of the installations in 2016 that is notable, but the quality and specific characteristics of those installations, analyst says.
Energy storage analyst with GTM Research, Brett Simon said “2016 has been a “transition year” for U.S. energy storage.”
“2016 has seen a much more diverse energy storage market, both in terms of the types of systems (market segments) being deployed and the business models,” energy storage analyst with Navigant Research, Alex Eller also said.
While utility scale installations dominated the market in previous years, Eller said 2016 has seen more progress at all market levels. He pointed to contracts for demand response capacity and utility ownership programs as key drivers in that transition.
In June, for instance, Consolidated Edison, along with SunPower and Sunverge, announced a $15 million pilot program for a virtual power plant.
Eller also pointed to Southern California Edison’s selection of Swell Energy to install 20 MWh of storage across 3,000 homes for grid services as an example of an innovative business model that offers residential customers energy systems by aggregating systems and selling the output as a demand resource service to a utility.
In the commercial and industrial market, companies such as Stem and Advanced Microgrid Solutions (AMS) have had success using a similar business model that looks to monetize the benefits of storage for both hosts and utilities.
Recent changes in California ISO rules, could make even easier for storage to participate as a demand resource tool in the state’s wholesale market.