Strong growth in U.S. energy storage project financing

Q3/2016 finished with largest sum of U.S. project financing for energy storage in a single quarter

© GTM Research | solarserver.com

Total corporate investment totaled USD 812 million at the end of Q3, 2016 © GTM Research | solarserver.com

According to GTM Research’s (Boston, MA, U.S.) and ESA's latest U.S. Energy Storage Monitor, the third quarter of 2016 finished with the largest sum of U.S. project financing for energy storage in a single quarter so that total corporate investment totaled USD 812 million at the end of Q3, 2016.

Corporate Investments in Energy Storage at USD 660 million in Q3, 2016

Total corporate investments in Q3, 2016, including venture funding and project finance, totaled USD 659.8 million, five times the corporate investments in Q3, 2015 (USD 131.6 million). Notably, Q3, 2016 saw the largest amount of project financing for energy storage in any single quarter.

The largest announced deal in Q3, 2016 was USD 300 million in project financing that Tabuchi Electric received from the Electric & Gas Industries Association.

M&A activity included Total closing the company’s acquisition of Saft in July 2016. Tesla and SolarCity shareholders approved Tesla’s acquisition of SolarCity in November 2016.

The U.S. deployed 16.4 MW of energy storage in Q3, 2016

According to the Energy Storage Monitor, 16.4 MW of energy storage were deployed in Q3 2016, a 75% drop from the same quarter in 2015. Front-of-the-meter deployments dropped 96% from Q3, 2015, as no projects above 1 MW were brought on-line for the first time since Q2, 2014. Behind-the-meter deployments stayed essentially steady, increasing 1% from Q3, 2015.

Behind-the-meter deployments accounted for 86% of total MW deployed in Q3, 2016, a record percentage driven by strong performance in the non-residential space, along with a slow quarter for utility-scale deployments.

31.4 MWh of energy storage deployed in Q3, 2016

The U.S. deployed 31.4 MWh of energy storage in Q3, 2016, down 43% from 55.1 MWh in Q3, 2015, driven by a slow quarter in the front-of-the-meter segment.

Front-of-the-meter deployments fell from 26.3 MWh in Q3, 2015 to 3.7 MWh in Q3, 2016, a year-over-year decrease of 86%. As utility procurements come on-line in the coming months, we expect the front-of-the-meter segment to regain a significant market share, as several 4-hour duration projects are set to come on-line in Q4, 2016.

Behind-the-meter deployments were down 4% year-over-year, from 28.8 MWh in Q3, 2015 to 27.7 MWh in Q3, 2016. The behind-the-meter segment installed more than 10 MWh for the sixth consecutive quarter, showing the staying power of this market compared to the more volatile front-of-the-meter market over the past several years.

PJM (excl. NJ) and California collectively account for the majority of U.S. energy storage deployments in MW terms (81% combined share, down from 82% in Q2, 2016).

Lithium-ion batteries dominated the energy storage market for the eighth straight quarter, representing 96.2% of the market in Q3, 2016, down from 99.3% in Q2, 2016. Lead acid batteries came in second with 2.7% of the market in Q3, 2016.

U.S. energy storage annual deployments to exceed 2 GW by 2021

GTM Research expects the U.S. energy storage market to grow from 226 MW in 2015 to 260 MW in 2016, and over 2.0 GW by 2021, eight times the size of 2016 market.

Greentechmedia Research