In 2023, the energy storage industry shifted gears from prosperity to intense competition, giving rise to several focal points. Examining the global energy storage market, the installation base remained relatively low from 2021 to 2023. Consequently, as market demand soared, the global installed capacity experienced double growth.
Reviewing the energy storage installed capacity in 2023, TrendForce will delve into the global landscape, focusing on two major markets: China and the United States.
China: A Remarkable Growth Trend
China's growth rate surpassed 100%, showcasing a positive trajectory. Analyzing monthly installed capacity data from January to October 2023 reveals that China's new energy storage installations reached 13.1 GW/27.1 GW, a substantial increase compared to the same period the previous year.
Examining the chart below, China experienced two peaks in installed capacity in June and July, attributed to the rush in installations around June 30. This surge was driven by both grid connections and installation rushes, significantly elevating the installed capacity. A similar scenario is expected in December, with Q4 anticipating a rush in installations as grid connection deadlines approach.
In 2023, TrendForce anticipates China's energy storage installed capacity to reach 20 GW/44.2 GWh, marking a year-on-year growth of 177% and 186%, respectively. Although the actual installed capacity in 2023 falls slightly below the initially high expectations, the overall growth rate still exceeds 100%. This underscores a doubling of China's installed capacity, indicating a robust and high-speed growth trend.
United States: Overcoming Grid Congestion Challenges
The overall installed capacity in the United States has been slightly lower than anticipated, primarily due to grid congestion challenges. Analyzing monthly installed capacity, the data for new energy storage installations in June and July showcased two significant peaks. In the first half of the year, the U.S. faced challenges related to supply chain issues and congested grid connections, leading to lower-than-expected installed capacity and project delays. Additionally, the IRA bill failed to spur demand for energy storage.
Despite these hurdles, the backlog of installations in the third quarter has shown improvement, with large-sized energy storage projects demonstrating stable month-on-month growth. It is anticipated that the United States will maintain a consistent increase in installed capacity quarter by quarter throughout 2023.
According to EIA data, new energy storage installations in the United States reached 4.55 GW from January to October 2023. EIA forecasts project an additional 3.8 GW to be installed from November to December, bringing the total for 2023 to 8.35 GW—a year-on-year growth of 102%. However, compared to last month's forecast capacity of 8.55 GW, there's a slight decrease.
The actual grid connections in almost every month of the year have been lower than expected, leading to the anticipation that the overall grid connection of installations in the U.S. for the entire year of 2023 will be slightly lower than initially expected. With declining raw material costs, increased certainty in IRA policy, and simplified policy processes, larger installations are expected to rise further, considering the project reserves.
Driven by Favorable Policies and Cost Reductions, the Energy Storage Industry is Set for Positive Growth
Benefiting from favorable policies and reduced costs, the energy storage industry is poised for positive development. Globally, the installed demand for energy storage is expected to remain high in 2023, with TrendForce projecting a new installed capacity of 52 GW/117 GWh. Countries are accelerating their energy transformation efforts, introducing favorable policies to catalyze the rapid growth of installed capacity.
Moreover, the current industry chain's raw material prices have experienced a decline, and production capacities across various segments are increasing rapidly. The quoted price of Energy Storage Systems (ESS) has significantly dropped, contributing to the improved economics of energy storage and fostering increased demand for installations.
The combination of favorable policies and cost reductions is expected to propel the energy storage industry into a substantial growth period. Looking ahead to 2024, TrendForce anticipates that the global new installed capacity of energy storage will reach 71 GW/167 GWh, marking a year-on-year growth of 36% and 43%, respectively, and maintaining a high growth rate.