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March 2016
U.S. Energy Storage Monitor:
2015 Year in Review Executive Summary
1GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
U.S. Energy Storage Monitor is a quarterly publication ...
2GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
2015 2014 Change
Total Deployments (MW) 221 65 Up 243%
...
3GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
• 221.4 MW of energy storage was deployed in 2015, maki...
4GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
• PJM (excl. NJ) was the largest utility-scale market i...
5GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
• In 2015, lithium-ion systems made up 96% of the total...
6GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
MISO
MISO created a platform to address storage-related...
7GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Front-of-the-Meter Policy and Market Developments, Q4 2...
8GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Behind-the-Meter Policy and Market Developments, Q4 201...
9GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Behind-the-Meter Policy and Market Developments, Q4 201...
10GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
• We expect significant growth in the U.S. market over...
11GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
$432
$2,456
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000...
12GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
$365
32
0
10
20
30
40
$0
$200
$400
$600
$800
2010 2011...
GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Renewable Tax Credits Extension
14GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
In December 2015, Congress passed an Omnibus Spending ...
15GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
ITC Extension Has Major Implications for U.S. Solar
U....
16GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Tax Credit Extension Expected to Spur Further Growth i...
17GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review
Produced in a collaboration between GTM Research and t...
For more information on GTM Research resources, including
additional coverage of the U.S. energy storage market,
please co...
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U.S. Energy Storage Monitor: 2015 Year in Review Executive Summary

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U.S. Energy Storage Monitor:
2015 Year in Review Executive Summary
U.S. Energy Storage Monitor is a quarterly publication of GTM Research and the Energy Storage
Association (ESA). Each quarter, we gather data on U.S. energy storage deployments, prices, policies,
regulations and business models. We compile this information into this report, which is intended to
provide the most comprehensive, timely analysis of energy storage in the U.S.

Published in: Engineering
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U.S. Energy Storage Monitor: 2015 Year in Review Executive Summary

  1. 1. March 2016 U.S. Energy Storage Monitor: 2015 Year in Review Executive Summary
  2. 2. 1GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review U.S. Energy Storage Monitor is a quarterly publication of GTM Research and the Energy Storage Association (ESA). Each quarter, we gather data on U.S. energy storage deployments, prices, policies, regulations and business models. We compile this information into this report, which is intended to provide the most comprehensive, timely analysis of energy storage in the U.S. Notes: • All forecasts are from GTM Research; ESA does not predict future pricing, costs, or deployments • References, data, charts and analysis from this report should be attributed to “GTM Research/ESA U.S. Energy Storage Monitor” • Media inquiries should be directed to Mike Munsell from GTM Research (munsell@gtmresearch.com) or Matt Roberts with the Energy Storage Association (m.roberts@energystorage.org) For more information or to purchase the full report, visit www.energystoragemonitor.com. About This Report
  3. 3. 2GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review 2015 2014 Change Total Deployments (MW) 221 65 Up 243% Total Deployments (MWh) 161 86 Up 88% Front-of-Meter Deployments (MW) 187 58 Up 223% Behind-the-Meter Deployments (MW) 35 6.9 Up 405% Utility-Scale System Price ($/kWh) $700-$1,200 $800-$1,300 Down 8% to 13% Utility-Scale Pipeline (MW) 6,638 3,630 Up 83% Number of Markets With Policy Developments 20 State Markets, 4 Regional Markets, and Federal 10 State Markets, 1 Regional Market, and Federal 13 Additional Markets Cumulative Five-Year Forecast (MW) 4,030 (2016-2020) 2,294 (2015-2019) Up 76% 2015 Energy Storage Scorecard
  4. 4. 3GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review • 221.4 MW of energy storage was deployed in 2015, making it the largest year for reported deployments, with a 243% increase from total MW deployed in 2014 • The front-of-the-meter segment grew more than twofold from the previous record and tripled in deployments from last year • The behind-the-meter sector grew fivefold compared to 2014 A Record Year for U.S. Energy Storage Market With 221 MW of Deployments Front of the Meter Behind the Meter Total 0 20 40 60 80 100 120 140 160 180 200 U.S.EnergyStorageDeployments(MW) 2012 2013 2014 2015 0 5 10 15 20 25 30 35 40 U.S.EnergyStorageDeployments(MW) 2012 2013 2014 2015 221 0 50 100 150 200 250 U.S.EnergyStorageDeployments(MW) 2012 2013 2014 2015
  5. 5. 4GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review • PJM (excl. NJ) was the largest utility-scale market in 2015, followed by All Others. California’s AB 2514 mandate procurement has not resulted in any front-of-meter deployments to date, keeping it out of a top-three spot in 2015. • California was the largest non-residential market in 2015, 24 times bigger than the second-largest market, All Others. • The residential segment continues to be diverse, with a significant number of projects deployed in emerging markets in 2015. Hawaii made changes to its net energy metering policy and showed promise in the second half of 2015, taking the top spot for residential segment deployments. PJM (Excl. NJ), California and Hawaii Led Utility, Non-Residential, and Residential Segments in 2015 Rank Residential Non-Residential Utility 1 Hawaii California PJM (excl. NJ) 2 All Others* All Others* All Others* 3 California New York Hawaii *GTM Research is currently monitoring seven individual markets. Complete coverage of all markets is available in the full report.
  6. 6. 5GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review • In 2015, lithium-ion systems made up 96% of the total MW deployed, compared to 72% in 2014. Some of this difference can be attributed to a few large demonstration projects in 2014. Lithium-Ion Technologies Made Up 96% of 2015 Deployments (MW) Other includes flywheel and unreported energy storage technologies 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 EnergyStorageDeploymentsbyTechnology (MW) Lithium Ion Lead Acid Sodium Chemistries Flow - Vanadium Flow - Zinc Other
  7. 7. 6GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review MISO MISO created a platform to address storage-related market rules and questions, ranging from development of a fast AGC signal to tariffs and storage classification. Front-of-the-Meter Policy and Market Developments, Q4 2015 Washington HB 1897, a bill pertaining to rare earth element research, went into effect. FERC denied a proposal for the Klickitat Pumped Storage Project. WA Department of Commerce opened two grant solicitations under Clean Energy Fund 2. New York PSEG Long Island amended its South Fork Resources RFP and issued a new renewable capacity and energy RFP. NY PSC and NYSERDA authorized the Clean Energy Fund. Con Edison and Orange and Rockland issued a grid-scale energy storage RFI. California SCE and UCSD joined CalCharge. PG&E awarded energy storage contracts under its 2014 RFO. California Energy Commission held a workshop to discuss the role of bulk storage. PG&E, SCE and SDG&E announced energy storage procurement progress under AB 2514. CPUC issued a decision on Track 1 issues under the Energy Storage Procurement Framework and Design Program. CAISO Board of Governors approved changes to the NGR model under ESDER. Federal The Energy Policy Modernization Act was brought to the Senate floor. A Battery Energy Storage Caucus was formed by members of the U.S. House of Representatives. FERC held a hearing in November to discuss energy storage; also issued an order relating to 3rd-party provision of primary frequency response. U.S. DOE announced funding under the Grid Modernization Initiative. National Fire Protection Association sought comments in order to synthesize energy storage safety standards. U.S. Supreme Court upheld FERC Order 745. Congress extended the tax credits for renewable energy. AGC – Automatic generation control; ESDER – Energy Storage and Distributed Energy Resources; MISO – Midcontinent Independent System Operator
  8. 8. 7GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Front-of-the-Meter Policy and Market Developments, Q4 2015 (Cont.) Texas Austin Energy issued an RFI to solicit information on energy storage technology. TCEQ made funds available under the Texas Emissions Reduction Plan New Technologies Implementation Grant program. Oregon Oregon DOE and U.S. DOE awarded $295,000 under the Electrical Energy Storage Demonstration Project RFP. Oregon PUC held a workshop for stakeholder input on Docket UM 1751. Vermont Vermont Department of Public Service issued a Comprehensive Energy Plan. Arizona APS issued an All-Source RFP to procure between 400 MW and 600 MW of capacity resources by 2020. Colorado PSC Colorado/Xcel Energy submitted two project proposals under the Innovative Clean Technologies program. Kentucky FERC denied a proposal for a pumped storage project in Mason County. Guam Guam Power Authority is soliciting bids for up to 40 MW of energy storage. APS – Arizona Public Service; PSC Colorado – Public Service Company of Colorado, a subsidiary of Xcel Energy; TCEQ – Texas Commission on Environmental Quality
  9. 9. 8GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Behind-the-Meter Policy and Market Developments, Q4 2015 California CPUC passed net-metering successor tariff (NEM 2.0); also proposed revisions to SGIP program and mandated the disbursement of 50% of 2016 program funds before new rules approved. CAISO announced winners under 2015 DRAM. California Energy Commission approved EPIC funding grants for four energy storage companies; also issued a scoping memo to revise DRP. Hawaii Distributed Energy Resource Council of Hawaii was formed. HECO filed an Interim Demand Response Portfolio Program Application; also solicited comments on Integrated Demand Response Portfolio Plan and initiated a Commercial Storage Program with Stem and Energy Excelerator. Hawaii PUC mandated that HECOrefile its TOU proposal. New York NY PSC and NYSERDA authorized the Clean Energy Fund. NYSERDA and Eos Energy Storage announced collaboration on Wappingers Falls Resiliency Project. NY PSC approved Con Edison‘s amendments on its Commercial Demand Response Tariff. Con Edison issued a project implementation plan for its Clean Virtual Power Plant project under NY REV. New Jersey NJ BPU approved revisions for the Fiscal Year 2016 RenewableElectric Storage Incentive Program. Colorado PSC Colorado/Xcel Energy submitted two project proposals under the Innovative Clean Technologies program. DRAM – Demand Response Auction Mechanism; DRP – Distribution Resource Plan; NJ BPU – New Jersey Board of Public Utilities; PSC Colorado - Public Service Company of Colorado, a subsidiary of Xcel Energy
  10. 10. 9GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Behind-the-Meter Policy and Market Developments, Q4 2015 (Cont.) Arizona TEP filed a rate case with ACC that would change net-metering rules if approved. ACC approved APS’ REST Implementation Plan. Nevada PUCN established new net energy metering (NEM) rules and introduced time-of-use rate option under new NEM structure. Vermont Vermont Department of Public Service issued a Comprehensive Energy Plan. Green Mountain Power began offering Tesla Powerwalls for retail customers. Massachusetts MassCEC issued an RFI under its Microgrid Grant Program to be followed by an RFP in the future. Montana MDU withdrew its residential demand charge proposal. Federal U.S. DOE announced funding under the NODES program; also announced funding under Grid Modernization Initiative and announced project awards under the SHINES program. National Fire Protection Association sought comments in order to synthesize energy storage safety standards. U.S. Supreme Court upheld FERC Order 745. Congress extended the tax credits for renewableenergy. ACC – Arizona Corporation Commission; APS – Arizona Public Service; PUCN – Public Utilities Commission of Nevada; NODES - Network Optimized Distributed Energy Systems; SHINES – Sustainable and Holistic Integration of Energy Storage and Solar PV; TEP – Tucson Electric Power
  11. 11. 10GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review • We expect significant growth in the U.S. market over the next five years across all segments, resulting in a 1,662 MW annual market by 2020 – 26 times the size of the 2014 market and 8 times the size of the 2015 market. • The behind-the-meter segment is expected to account for an ever-larger share of total MW deployed each year through 2020. U.S. Annual Energy Storage Deployments Will Cross 1 GW in 2019, Reach 1.7 GW by 2020 Source: GTM Research 221 1,662 - 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E EnergyStorageDeploymentsby Segment(MW) Utility Non-Residential Residential
  12. 12. 11GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review $432 $2,456 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E AnnualEnergyStorageMarketSize (Million$) Utility Non-Residential Residential U.S. Energy Storage Market to Reach $2.5 Billion by 2020, Sixfold Growth From 2015 • The U.S. energy storage market grew from $134 million in 2014 to $432 million in 2015 (up 222%). • By 2020, the U.S. energy storage market will be worth $2.5 billion, an 18-fold increase from 2014 and a sixfold increase from 2015. • The utility-scale segment will continue to be the largest segment through 2020, growing from $347 million in 2015 to over $1 billion by 2020. By 2019, the two behind-the-meter segments combined will be large than the utility segment. Source: GTM Research
  13. 13. 12GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review $365 32 0 10 20 30 40 $0 $200 $400 $600 $800 2010 2011 2012 2013 2014 2015 DealCount DisclosedValue(Million$) VC Project Financing Deal Count • The total disclosed investment in 2014 was boosted by a rumored $250 million investment in Boston-Power (shaded in the figure above). • In 2015, battery technologies accounted for over 50% of total investment, while software technologies accounted for over 40%. Corporate Investments in Energy Storage Totaled $365 Million in 2015 Note: Data excludes battery materials and upstream companies. 2014 data differs from U.S. Energy Storage Monitor 2014 Year in Review due to exclusion of EV startup Atieva and inclusion of stealth startup Fluidic Energy.
  14. 14. GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Renewable Tax Credits Extension
  15. 15. 14GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review In December 2015, Congress passed an Omnibus Spending Bill which included a provision for the extension of the Investment Tax Credit (ITC) for solar and Production Tax Credit (PTC) for wind. Previously the ITC was set to step down at the end of 2016, resulting in a 10% tax credit for non-residential and third-party owned (TPO) residential systems, and 0% for customer-owned residential systems. Similarly, the PTC had already expired on January 1, 2015. With the renewal, the 30% solar ITC will remain active through 2019, stepping down to 26% in 2020 and 22% in 2021; in 2022 the ITC will step down to the original levels proposed for 2017. A commence-construction clause is included as well, meaning that systems which are in the process of installation and interconnected by 2023 can still claim the larger tax credits. The 2.3-cent per kWh wind PTC was retroactively extended for 2015 and also extended by one year. Starting in 2017, the PTC will reduce by 20% (of 2016 value) each year through 2020. The ITC and PTC extensions will result in greater numbers of solar and wind installations. If installed alongside solar PV or wind, energy storage systems have historically been able to claim the tax credits. Thus, the tax credit extension has implications for the energy storage industry as well as the renewables industry, and will affect deployment rates over the coming years. The full report includes a discussion of the implications of the tax credit extensions on solar-plus-storage economics, as well as the implications of recent net energy metering reform decisions. Tax Credit Extension Will Spur Further Growth in Renewables and Paired Energy Storage
  16. 16. 15GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review ITC Extension Has Major Implications for U.S. Solar U.S. National PV Installed Capacity by Market Segment, Post-ITC Extension Source: GTM Research Q4 2015 Solar Executive Briefing 0 5,000 10,000 15,000 20,000 25,000 2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E AnnualInstallations(MWdc) Residential Non-Residential Utility Compared to the non-ITC scenario, GTM Research expects a 54% net increase in solar PV installations from 2016-2020, amounting to an additional 25 GW.
  17. 17. 16GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Tax Credit Extension Expected to Spur Further Growth in Storage Paired With Renewables U.S. Storage Deployment Paired With Renewables Differential Vs. No Extension -50 0 50 100 150 200 2016E 2017E 2018E 2019E 2020E AnnualStorageDeploymentsPairedWith RenewablesDifferential(MW) Residential Non-Residential Utility-Scale Compared to the non-ITC scenario, GTM Research expects an additional 0.5 GW of storage paired with renewables from 2016-2020, a 33% increase compared to a scenario with no tax credit extension. Source: GTM Research
  18. 18. 17GTM Research/ESA U.S. Energy Storage Monitor: 2015 Year in Review Produced in a collaboration between GTM Research and the Energy Storage Association (ESA), the U.S. Energy Storage Monitor is the industry’s only comprehensive, quarterly research report on energy storage markets, deployments, policies, financing and regulations in the U.S. The report is available for purchase quarterly or as an annual subscription. U.S. Energy Storage Monitor Content Executive Summary Full Report Energy Storage Deployments National Aggregate By State and Market Segment Deployments by Technology Not Available Available Market Trends National Highlights Detailed Analysis Pricing Data Not Available Quarterly Index Deployment Forecast National Aggregate By State and Segment Member Status Executive Summary Full Report (PDF Enterprise License) Individual Quarterly Report Annual Subscription-4 reports ESA Members Free $1,500 $5,000 Non-ESA Members $2,500 $8,000 Technology Firms Component Manufacturers System Integrators Third-Party Financiers Project Developers Utilities and IPPs Universities Policymakers and Regulators Executive Summary vs. Full Report Content Report Pricing This report is relevant to: For more information, contact Tate Ishimuro at ishimuro@gtmresearch.com or visit www.energystoragemonitor.com
  19. 19. For more information on GTM Research resources, including additional coverage of the U.S. energy storage market, please contact sales@gtmresearch.com. March 2016

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