US energy storage deployment fell 39% in the first quarter of the year, compared with the same period last year, according to a new report from Wood Mackenzie and the US Energy Storage Association.
The ‘US Energy Storage Monitor’ report said 97.5MW was installed in the first three months of the year.
California led in non-residential storage, followed by Massachusetts and New York with a few large community solar-plus-storage projects.
Wood Mackenzie said the decline was mainly down to a slow front-of-the-meter segment.
However, the segment is expected to bounce back significantly in upcoming quarters as larger, longer-duration systems come online thanks in large part to utility procurements, the report said.
The effects of the coronavirus did not hit the US market until late March, therefore the impact in Q1 was muted, it added.
However, Q2 2020 has already seen challenges relating to customer acquisition, installation and interconnection, the report said.
US Energy Storage Association chief executive Kelly Speakes-Backman said: “The first quarter numbers indicate that despite dampening effects of the coronavirus crisis, energy storage will ultimately experience a positive growth trajectory in 2020.
“This is evidenced by increases in both capacity and deployments of the residential and non-residential sectors.
“While the ongoing pandemic will more seriously affect Q2, we anticipate year-over-year growth as states have continued to pass regulations and legislation to encourage energy storage deployments.”
Wood Mackenzie senior analyst Brett Simon said: “Q1 2020 posted a strong quarter for behind-the-meter (BTM) deployments in the US.
“However, this is a calm before the storm for the BTM market: preliminary conversations with market players in April and May indicate strong impacts from the coronavirus.”
Utilities have reported as much as a 40% decline in residential storage applications from March to April 2020, the report said.
But on the plus side, installers and developers report few issues securing product they need, as much of their supply comes from Asian factories that have ramped back up production over the last couple months.
Overall market value will cross the $1bn annual threshold in 2020 despite the impacts of the coronavirus.
By 2025, annual market value is expected to sit at $6.9bn, with annual deployments hitting nearly 7GW.