According to Trendforce data, the global energy storage installations in 2024 are expected to reach 74GW/173GWh, representing a year-on-year growth of 33% and 41%. China, the United States, and Europe will continue to account for 85% of the global total.
Taking the United States as an example, it has been the largest and fastest-growing energy storage market globally in recent years. The U.S. energy storage industry has developed over decades into a diverse, active market with strong policy support and numerous participants, playing a significant role in the global energy storage sector.
01
History of Energy Storage Development in the United States
The research on energy storage technology began in the late 20th century, initially focusing on non-battery storage technologies such as pumped hydro storage, compressed air energy storage, flywheel storage, and supercapacitors. Lithium-ion battery technology also matured during this period and started to be used in consumer electronics.
With the development of renewable energy, especially wind and solar power, energy storage emerged as a key solution to the intermittency and variability of these energy sources. Small-scale demonstration projects, such as battery energy storage systems for grid stability and backup power, began to appear.
In the mid-2000s, the U.S. began to encourage the research and application of energy storage technologies through research funding, tax incentives, and demonstration project subsidies. For example, the U.S. Department of Energy (DOE) established several energy storage technology research programs. Some regions also started allowing energy storage resources to participate in wholesale electricity markets, with the California Independent System Operator (CAISO) being the first to incorporate storage into the ancillary services market.
Since 2003, large-scale energy storage capacity in the U.S. has increased, and as the cost of lithium-ion batteries has declined and technology has advanced, the economics of battery energy storage systems have improved, leading to commercial storage projects coming online.
After 2010, states such as California, New York, and Massachusetts set energy storage deployment targets through legislation or executive orders, greatly stimulating market development. For instance, California set a 1.3GW energy storage deployment target in 2013.
In 2016, after the U.S. installed a 197MW large-scale battery storage project, the annual increase in power capacity reached a historical high. By the end of 2017, the first large-scale battery storage facility was operational, with a total of 708MW of power capacity.
In addition to large-scale storage, small-scale battery storage has also seen significant growth. In 2013, California established an energy storage mandate requiring investor-owned utilities to install 1325MW of storage across transmission, distribution, and customer levels by 2024.
By 2016, U.S. utility reports showed over 66MW of small-scale storage capacity, with over 60% installed in the commercial sector and 31% in the industrial sector. Notably, nearly 90% of small-scale storage capacity in the U.S. was in California, particularly owned by four utilities: Southern California Edison (SCE), Pacific Gas and Electric Company (PGE), San Diego Gas and Electric Company (SDGE), and Sacramento Municipal Utility District.
According to EIA data, by the end of 2022, the U.S. had 4.28GW of standalone storage and 3.24GW of solar-paired storage in operation, accounting for 50% and 38%, respectively. The planned standalone storage and solar-paired storage capacities for 2023-2024 are 11.37GW and 10.77GW, accounting for 50% and 47%.
02
U.S. Energy Storage Industry Chain
According to the U.S. EIA’s comparison of various energy types like wind, solar, and storage, the U.S. is set to further develop battery storage, primarily lithium-ion batteries, which account for over 80% of large-scale power storage capacity.
Nickel-based batteries were among the first used in large-scale battery storage systems in the U.S., though they have lower cycle life compared to sodium-based batteries, which are more popular, accounting for 3% of U.S. large-scale power capacity by the end of 2016.
Lead-acid batteries, a staple of storage technology, have been gradually phased out. However, by the end of 2016, lead-acid batteries still accounted for 2%-3% of large-scale battery storage capacity in the U.S.
According to Wood Mackenzie, the U.S. added 3.58GW/10.5GWh of new electrochemical storage in 2021, representing about 38% of global new installations, with growth exceeding 200% for two consecutive years.
The U.S. energy storage market is divided into front-of-the-meter (large-scale, utility storage) and behind-the-meter (residential and commercial storage) markets. The front-of-the-meter market primarily serves power system needs such as renewable energy integration, grid peak shaving and valley filling, and enhancing grid flexibility. The behind-the-meter market focuses on energy management, backup power, and demand response on the user side.
In the residential storage market, Tesla held a 73% market share in 2020, followed by LG with 12%, and other brands like SolarEdge, Enphase, and Sonnen. For large-scale storage, local integrators like Fluence procure cells from companies like CATL and LG and are strong in construction and operation. Other integrators include Wärtsilä, AES Energy Storage, and Powin Energy, handling overall project design, equipment integration, and installation.
By 2021, Tesla, BYD, and Enphase ranked as the top three, with Tesla maintaining a leading 55% market share. LG, however, faced significant setbacks due to multiple fire incidents, leading to large-scale product recalls and a severe impact on its market share in the U.S.
Notably, Israeli company Solaredge is a leading residential inverter supplier in the U.S., with substantial shipments of its residential storage products in Europe. Shenzhen Kstar supplies battery packs for Solaredge. Additionally, some GE-branded residential storage products sold in the U.S. are produced by Chinese company GoodWe.
However, U.S. consumers prefer strong brands. In residential storage, apart from BYD and Zhejiang Aisolar (Solax), few other Chinese brands are present. The U.S. solar storage system installer market is highly concentrated, with the top ten installers holding over 60% of the market share in 2020, with Tesla and SunRun each holding about 20%, far surpassing other manufacturers.
03
Words in the end
In summary, as one of the world’s largest energy storage markets, driven by the rapid increase in photovoltaic and wind power installations and national policies and storage technology advancements, the U.S. energy storage market continues to grow rapidly. The U.S. has made significant advancements in electrochemical storage, particularly lithium-ion battery technology, actively promoting renewable energy integration and utilization. It is foreseeable that the U.S. energy storage market will continue its rapid development, positively impacting the global energy transition.
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