The U.S. energy storage market continued its strong growth in the third quarter of 2024, with the utility-scale segment setting a new record in the third quarter with 3,431 megawatts (MW) and 9,188 megawatt-hours (MWh) deployed.

According to the latest US Energy Storage Monitor report by the American Clean Power Association (ACP) and Wood Mackenzie, published today, the third quarter set the highest record for installations in a third quarter, with a total of 3,806 MW and 9,931 MWh deployed, marking an 80% and 58% increase compared to last year’s figures.

Texas and California markets show no signs of slowing down

Energy storage deployments at the utility scale in both Texas and California were strong in the third quarter as both markets continue to adopt storage as a grid solution.

Texas tripled installations compared to the previous quarter with nearly 1.7 GW added, while California produced the highest amount of GWh in installations with nearly 6 GWh added, thanks to its focus on longer-duration plants.

Arizona, Colorado, Florida, and Vermont also recorded installations in the third quarter, showing a national appetite for utility-scale storage deployments.

“We’re seeing the energy storage industry address a real need across the country to provide reliability in an affordable and efficient way for communities,” said John Hensley, Senior Vice President of Market Analysis and Policy at ACP.

“With 64 GW of new energy storage expected over the next four years, the market signal remains clear that energy storage is a critical component of the grid in the future.”

“The rapid deployment of energy storage systems we’re seeing in the U.S. is not only improving reliability and affordability, but also driving economic expansion. This additional storage capacity is helping meet growing energy demand and supporting growing industries like manufacturing and data centers,” said Noah Roberts, Vice President of Energy Storage at ACP. “Energy storage is crucial for energy security and helping to meet rising demand.”

Residential market breaks historical quarterly record

The residential market set a historical record with 346 MW of residential storage installed in Q3 2024, a 63% increase from the previous quarter.

California, Arizona, and North Carolina led the growth, installing 56%, 73%, and 100% more residential storage in the third quarter compared to the second, despite battery supply shortages.

Community, commercial, and industrial (CCI) scale remained stable with 29 MW installed, a slight 4% decrease compared to last year’s figures.

Residential and utility-scale sectors will lead future growth

The residential and utility-scale segments will continue to lead the market, with utility-scale installations projected to double by 2028, reaching a cumulative volume of 63.7 GW, and the residential segment expected to install 10 GW of storage in the same period.

“We’ve seen consistent growth in the market this year, especially in the utility-scale segment,” said Nina Rangel, Senior Research Analyst at Wood Mackenzie.

“Overall, storage installations will grow by 30% in 2024, which will make it the strongest year for the industry so far. However, maintaining this pace will be challenging. Between 2025 and 2028, we project an average annual growth rate of 10% as development constraints continue at the early stage.”

Allison Weis, Global Director of Storage at Wood Mackenzie, noted that while steady growth is expected, there are some uncertainties with the new presidential administration, as changes in certain tax credits and protectionist measures, such as higher tariffs, could come into play.

“While there could be potential opportunities in a new pricing environment for domestic manufacturers in terms of competition, any major changes to tax incentives or an increase in tariffs could outweigh the benefits and impact the development of new projects,” said Allison Weis, Global Director of Storage at Wood Mackenzie.