California and Texas spur US to smash third quarter battery storage installations record
Declining system prices at risk should incoming President-elect Donald Trump slap hefty tariffs on component imports
The US smashed its third quarter grid-scale battery storage installation record with 3.43GW, an 84% increase from a year earlier, with California and Texas dominating activity, according to latest data from Wood Mackenzie.
California comprised nearly 6GWh of the 9.2GWh added nationwide, a 60% increase from third quarter 2023, the energy analytics firm said in a report for American Clean Power Association (ACP), a national trade group.
California produced the highest GWh thanks to its focus on longer duration plants even though Texas led with nearly 1.7GW capacity added.
"The rapid energy storage deployment we're seeing in the United States not only enhances reliability and affordability but also drives economic expansion,” said Noah Roberts, vice president, energy storage, at ACP.
“This additional storage capacity is helping meet increasing energy demand and is supporting growing industries like manufacturing and data centers," he added.
Third quarter storage additions for all market segments that include CCI and residential totaled 3.8GW, also up 80% and a record for the period.
Looking ahead, Woodmac said the industry is evaluating impacts of last month’s national elections that resulted in Donald Trump regaining the White House for a second and final four-year term, and his Republican Party gaining control of Congress.
Trump has threatened to slap tariffs on some countries that supply battery components and materials in an apparent effort to extract concessions on trade and other issues such as crackdowns on sourcing of illegal drugs entering the US.
While he will not enter office until 20 January, Woodmac said potential tariffs may increase BESS costs by more than 10% by 2026. Trump has floated a 60% tariff proposal on all imports from China.
Woodmac does not anticipate Republicans in Congress will attempt to fully repeal the federal investment tax credit (ITC) for battery storage, although bonus adders could be at risk.
If they retain the manufacturing tax credit and domestic content adder, “US-based turnkey systems would be more competitively priced but domestic availability falls well short of demand,” it said in the report.
Woodmac anticipates 2024 grid-scale installations will total 10.4GW, up 25% from a year earlier. In the five-year period through 2028, additions will increase 10% annually with a cumulative 63.7GW in new capacity.
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