Quarterly U.S. solar and wind installations have fallen to their lowest levels in three years, and of the top three clean energy technologies, only battery storage has performed strongly.
Although the U.S. clean energy industry faces a bright future in the coming years, the third quarter of this year was a tough one, especially for solar PV installations, according to the American Clean Power Council (ACP).
ACP merged with the Energy Storage Association earlier this year and includes energy storage market trends and data in its quarterly clean electricity market report.
From July to September, a total of 3.4GW of new capacity from wind power, photovoltaic power generation, and battery energy storage was put into operation. Compared to Q3 2021, quarterly wind installations were down 78%, solar PV installations were down 18%, and overall installations were down 22%, but battery storage had the best second quarter so far , accounting for 1.2GW of total installed capacity, an increase of 227%.
Looking ahead, while the report highlights the challenges faced in terms of supply chain delays and lengthy grid connection queues, it highlights a positive outlook ahead, especially given that the Inflation Cut Act added long-term certainty and introduced tax credit incentives for stand-alone energy storage.
As of the end of the reporting period, the total operating capacity of clean energy assets in the United States was 216,342MW, of which battery energy storage capacity was 8,246MW/20,494MWh. This compares with just under 140,000MW of onshore wind, just over 68,000MW of solar PV and just 42MW of offshore wind.
During the quarter, ACP counted 17 new battery energy storage projects coming on stream, totaling 1,195MW/2,774MWh, out of a total installed capacity of 3,059MW/7,952MWh so far this year.
This underscores the speed at which the installed capacity base is growing, especially as ACP previously released data showing that 2.6GW/10.8GWh of grid-scale battery energy storage installations were deployed in 2021.
Perhaps less surprisingly, California is the leading state for battery deployment in the US, with 4,553MW of operational battery storage. Texas, with more than 37GW of wind power, is the leading state in overall clean energy operating capacity, but California is a leader in solar and battery storage, with 16,738MW of operational PV.
“Aggressive Storage Deployment Lowers Energy Costs for Consumers”
Nearly 60% (just over 78GW) of the entire clean electricity storage pipeline under development in the US is solar PV, but there are still 14,265MW/36,965MWh of storage capacity in development. Nearly 5.5GW of planned storage is in California, followed by Texas with just over 2.7GW. Nevada and Arizona are the only other states with more than 1GW of planned energy storage, both at around 1.4GW.
The situation is similar for grid-connection queues, with 64GW of battery storage waiting to be grid-connected in the CAISO market in California. The deregulated market of ERCOT in Texas has the second-highest storage fleet at 57GW, while PJM Interconnection is a close second with 47GW.
Finally, at the end of the third quarter, less than one-tenth of the clean power capacity under construction was battery storage, with 3,795MW out of a total of 39,404MW.
The decline in solar PV and wind installations was mainly due to delays caused by various factors, with nearly 14.2GW of installed capacity delayed, more than half of which had been delayed in the previous quarter.
Due to ongoing trade restrictions and anti-dumping countervailing duties (AD/CVD), solar PV modules are in short supply in the US market, said JC Sandberg, interim CEO and chief defense officer of ACP, “the process of US Customs and Border Protection is opaque and slow” .
Elsewhere, other supply chain constraints have hit the wind industry, and while they have also hit the battery storage industry, the impact has not been as severe, according to the ACP. The most delayed storage projects are co-build or hybrid solar-plus-storage projects, which have been slowed down as the solar portion faces logistical issues.
While the Inflation Cut Act will foster growth in the clean energy industry, certain aspects of policy and regulation are hindering development and deployment, Sandberg said.
“The solar market has repeatedly faced delays as companies struggle to secure solar panels due to opaque and slow-moving procedures at US Customs and Border Protection,” Sandberg said. Uncertainty over tax incentives has limited wind’s growth development, highlighting the need for clear guidance from the Treasury Department in the near term so that the industry can deliver on the promise of the IRA.”
“Energy storage was a bright spot for the industry and had the second-best quarter in its history. Aggressive deployments of energy storage continue to drive down energy costs for consumers and enhance grid reliability.”