The energy storage market is on track for a record year in 2021 with annual installations set to exceed 10 GW for the first time, up from 4.5 GW in 2020, according to a new report from IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions.
“The energy storage industry will begin significant multiyear growth in 2021, continuing until 2030, as the technology begins to form a core component of power grids in developed markets and new opportunities in developing markets continue to emerge,” – George Hilton, senior analyst Clean Technology at IHS Markit.
United States continues to dominate market, but APAC demand accelerates:
The United States will account for 50% of the global market in 2021 following a threefold increase from the prior year as energy storage begins to provide power during times of peak demand at a significantly wider scale. IHS Markit expects the United States to continue to extend its dominance of the global market, gaining market share until 2023 when the project pipeline reduces.
However, from 2025 aggressive decarbonization plans in mainland China will lead to rapid growth in the region, driving Asia Pacific to account for 44% of annual installations by 2030.
In Europe, a 70% increase in annual installations will be realized in 2021, as the technology will begin to be used more widely to keep the grid frequency stable and reduce the intermittency of renewable energy.
Solar-plus-storage emerges as growth driver:
Solar-plus-storage installations are capitalizing on recent policy changes in the United States such as the extension of the solar Investment Tax Credit (ITC), meaning that energy storage projects co-located with solar will continue to benefit from a reduced tax burden through to 2025.
In the past six months, 1.3 GW of tenders have been announced or awarded for storage which will be co-located with solar PV. Combined with the impact of the U.S. ITC, IHS Markit predicts that 3.8 GW of storage co-located with solar will be completed in 2021 compared with 0.9 GW in 2020 – an increase of 320%.
“The global market for energy storage is maturing rapidly. The number of countries where annual installations exceed 100 MW will increase from nine in 2020 to 17 in 2022. The three biggest contributors to this growth will be the United States, mainland China and Australia, which are together forecast to supply 4.5 GW of capacity in 2021,” – George Hilton, senior analyst Clean Technology at IHS Markit.
To learn more about IHS Markit’s top 10 Cleantech trends in 2021, download the whitepaper here.