Leading US States for Utility-Scale Energy Storage

The US utility-scale energy storage market has been the world's largest and fastest growing since 2015 and is projected to maintain that position through 2023. In the US, utility-scale energy storage has quickly transformed from an expensive and poorly understood niche technology to a major source of new investment with thousands of megawatts of new projects being developed.

However, the US market is highly fragmented with only a few US states accounting for most activity. New states are emerging as strong markets, but each state has varying market structures, regulations, economic applications for projects, and other considerations. Understanding the differences between states in terms of their market structures, utility processes, competitive landscape, and supportive policies is critical for success in the energy storage industry.

This Guidehouse Insights report is intended to highlight large and promising state markets, and explore the landscape of market drivers, policies, and new projects in each of the 10 leading states. Forecasts for new utility-scale energy storage deployments are provided for the top 10 US states and the country's market in its entirety. This report also provides an update to US market forecasts considering recent changes, including the impact of the COVID-19 pandemic.

KEY QUESTIONS ADDRESSED:

• What factors are driving the utility-scale energy storage market in the US?

• Which states will see the most utility-scale energy storage capacity built in the next 10 years?

• What are the most notable new energy storage projects in the US?

• Which states should project developers and vendors target for new projects?

• How has the COVID-19 pandemic affected the growth of energy storage in the US?

WHO NEEDS THIS REPORT:

• Energy Storage System Integrators
• Energy Storage Project Developers
• Wind Project Developers
• Solar Project Developers
• Independent Power Producers
• Utilities
• Engineering, procurement, and construction (EPC) firms
• Governments and energy regulatory agencies
• Investor community

Table of Contents

Spark

Context

Recommendations

The US Utility-Scale Energy Storage Market Is Rapidly Growing

• The US Utility-Scale Energy Storage Market Is Hitting Its Stride

• State Procurement Targets Are the First Growth Step in Many Markets

• Utility Procurements Are the Foundation of Many Business Models

• Wholesale Market Opportunities Provide New Project Revenue Streams

California, New York, and Texas Lead Top 10 US Markets

• Arizona Takes Advantage of Solar Resources

• California Energy Storage Market Remains on Top

• Florida Pursues Ambitious Solar Energy Goals

• Hawaii's Aggressive Renewal Generation Adoption Creates an Energy Storage Need

• Massachusetts Has Strong Pipeline of New Projects and Favorable Project Economics

• Nevada Adopts Solar Plus Storage to Expand Nascent Market

• New Jersey Sustainability Plans Create Opportunity for Market Growth

• New York Policies and Incentives Help Grow the Market

• Texas Has a Complex Energy Storage Market

• Virginia Makes the List Through Pumped Hydro Projects

Developments Are Required for Other States to Catch Up

• Watch for Rapid Growth in New Mexico, Colorado, and Oregon

• Expect Energy Storage to Become Competitive with Other Resources

• Monitor Pending Regulatory Reforms That Will Unlock Regional Growth

• Remain Flexible Facing Coronavirus Outbreak Challenges and Opportunities

LIST OF CHARTS AND FIGURES

• Annual Installed Utility-Scale Energy Storage Capacity by State, US: 2020-2029

LIST OF TABLES

• State Energy Storage Procurement Targets
• US Utility IRP Energy Storage Plans: 2018-1Q 2020