According to the latest edition of GTM Research and ESA’s U.S. Energy Storage Monitor, corporate investment in energy storage reached an all-time high in terms of quarterly investments in Q3. Disclosed venture funding and project finance totaled $660 million in the third quarter of the year, bringing the annual total to $812 million.
The largest announced deal during the quarter was $300 million in project financing from the Electric Gas & Industries Association for Tabuchi Electric. The report notes that Advanced Microgrid Solutions also closed a large project financing deal worth $200 million with Macquarie.
“Financing activities in this most recent quarter are noteworthy not just because of the scale, but also because project financing made up a significant portion of the total,” said Ravi Manghani, GTM Research’s director of energy storage. “While one quarter alone doesn’t constitute a trend, growth in project financing, especially in the residential segment, is a harbinger for further strengthening of deployment business models.”
Compared to corporate investment, deployments for the quarter were relatively quiet, however, as no front-of-meter projects above 1 megawatt were brought on-line. Across all segments, the U.S. saw 16.4 megawatts of energy storage deployed in the third quarter of 2016.
The behind-the-meter segment, which is made up of residential and commercial deployments, accounted for the majority of the quarter’s storage deployments. The U.S. deployed 14.1 megawatts of behind-the-meter storage in the third quarter of the year, which is essentially flat year-over-year.
Despite the low deployment total for the quarter, GTM Research expects a strong finish for 2016, as several front-of-meter projects are slated to come on-line in December. According to the report, the U.S. annual energy storage market will grow to 260 megawatts in 2016, up from 226 megawatts in 2015.
In 2016 we are seeing a critical trend in energy storage deployment — a wider range of competitive applications is becoming available to storage systems, and as a result demand for longer-duration systems is increasing,” said Matt Roberts, executive director of the Energy Storage Association. “Measured in megawatt-hours, the industry is projected to grow by more than 284 percent by the end of the year, reflecting a broader set of applications, an increase in distributed storage systems, and a larger role in grid reliability like the Aliso Canyon procurements.”
Key findings from the Q4 2016 U.S. Energy Storage Monitor
- Corporate investments in energy storage totaled $660 million in Q3 2016
- U.S. deployed 16.4 megawatts of energy storage in Q3 2016
- Behind-the-meter deployments accounted for 86 percent of total megawatts deployed in Q3 2016
- Lithium-ion batteries dominated the energy storage market for the eighth straight quarter, representing 96.2 percent of the market in Q3 2016
- Total closed the company’s acquisition of Saft in July 2016
- Measured in megawatt-hours, the industry is projected to grow by more than 284 percent by the end of 2016
- SCE and SDG&E have contracted 84.5 megawatts of energy storage as part of Aliso Canyon procurement