Energy Storage Systems in U.S. Expected to Surge in Second Half

Energy-storage installations in the U.S. will surge in the second half as utilities show increasing interest in the technology and battery prices slide, according to a study by GTM Research and the Energy Storage Association.

In the first quarter, 5.8 megawatts of power-storage capacity was added, up 16 percent from the same period a year earlier. Boston-based GTM expects a total of 220 megawatts for the year, with most of that coming in the second half, according to a statement Thursday. That’s more than triple the 62 megawatts of storage capacity added in 2014.

Utilities are starting to implement storage systems in part to better manage the intermittent power supplies that come from wind and solar farms. The technology is also becoming popular with commercial customers such as building owners and factories that can lower their energy costs by using stored power during peak periods during the day.

“If you look at the year-over-year trend the last three years, a lot of the projects end up getting commissioned in the second half of the year, and that kind of ramp up is expected this year as well,” Ravi Manghani, a GTM analyst and author of the report, said in a telephone interview. “The trend is pointing toward it being the biggest year.”

The median price for utility-scale storage systems using lithium-ion batteries was $900 a kilowatt-hour, according to the report, and there will be “downward movement in 2015” due to lower component costs and growing competition, according to the report.

California regulators have asked the state’s three biggest utilities to add 1.3 gigawatts of storage capacity by 2020, and Oregon is considering similar measures, Manghani said.

Almost 30 percent of the systems installed in the first quarter were for so-called behind-the-meter uses -- businesses, schools, government buildings and other utility customers that are finding ways to use storage to more efficiently manage their power consumption. That market may surpass utilities’ front-of-the-meter applications by 2018.

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