Grid-scale additions experienced a 98% increase in 2023 compared to 2022.

In 2023, the grid-scale segment concluded with 7,910 MW and 24,000 MWh, representing 90% of all installations. Anticipated growth in 2024 is significant, with an expected 30% increase in new capacity compared to 2023. However, growth is projected to slow down in 2025 and 2026 due to challenges in early-stage development, such as permitting, siting difficulties, and interconnection queue timelines, leading to a delay in project capacity.

By 2028, the annual installations in the residential segment are expected to reach 2.1 GW, while CCI is projected to install 1.2 GW annually.

The PV-only NEM 2.0 residential project pipeline in California is starting to decline, reinforcing our optimistic growth projections for 2024. Recent installation data from Puerto Rico indicates a rapidly expanding market due to the availability of new incentive programs.

The growth of storage incentive programs and the introduction of NEM 3.0 will bolster the commercial and industrial storage sector in the later years of the forecast. Additionally, the market will mature during this period, leading to reduced system costs and a more experienced development community.

It's important to note that this forecast was finalized prior to the California Public Utilities Commission issuing a proposed decision on community solar-plus-storage on March 4. The impact of this decision will be assessed in future editions of the Energy Storage Monitor. If the proposed decision is implemented, it will have a negative impact on our outlook.

Source: Wood Mackenzie