According to a new report released by research firm IHS Markit, the global market for energy storage will more than double in 2021 from the 2020 level.
The study forecasts the energy storage market will reach a record year in 2021 with annual installations exceeding 10GW for the first time, up from 4.5GW in 2020.
The US continues to dominate the market, but APAC demand accelerates.
The US 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.
The US is expected to dominate the market through 2023.
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However, from 2025 aggressive decarbonisation 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 realised 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 capitalising on recent policy changes in the US 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, 1.3GW of tenders have been announced or awarded for storage which will be co-located with solar PV. Combined with the impact of the US ITC, IHS Markit predicts that 3.8GW of storage co-located with solar will be completed in 2021 compared with 0.9GW in 2020 – an increase of 320%.
George Hilton, senior analyst Clean Technology at IHS Markit, said: “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.
“The global market for energy storage is maturing rapidly. The number of countries where annual installations exceed 100MW 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 4.5GW of capacity in 2021.”