3Q 2020

Leading US States for Distributed Energy Storage

The US distributed energy storage market has grown considerably from 2015 to 2020. Technological and manufacturing advances have led to significant cost declines in distributed energy storage systems (DESSs) located behind the meter (BTM). These factors present major motivation for the technology’s rapid uptake. In addition, states experiencing the benefits and challenges associated with high renewable penetration have deployed DESSs to ease the integration of renewables while expanding the quality of service for ratepayers. As the number of cities, states, and businesses committed to carbon reduction goals swells and the demand for onsite generation of renewable energy mounts, distributed energy storage is poised to take a leading role in the new energy paradigm shift.

However, the US market is highly fragmented with only a few US states accounting for most activity. New states are emerging with strong markets, but each state has varying market structures, regulations, economic applications for projects, and other considerations. Stakeholders must understand the differences among states in terms of market structure, utility processes, competitive landscape, and supportive policies.

This Guidehouse Insights report highlights large and promising state markets and explores the landscape of market drivers, policies, and new projects in each of the 10 leading states. This report provides forecasts for new distributed energy storage deployments for the top 10 US states and the country’s market in its entirety. This report also provides an update to US market forecasts considering recent changes, including the impact of the COVID-19 pandemic.

Pages 24
Tables | Charts | Figures 3
  • What factors are driving the distributed energy storage market in the US?
  • Which states will see the most distributed energy storage capacity built in the next 10 years?
  • What are the most notable new energy storage projects in the US?
  • Which states should project developers and vendors target for new projects?
  • How has the COVID-19 pandemic affected the growth of energy storage in the US?
  • Energy Storage System Integrators
  • Energy Storage Project Developers
  • Wind Project Developers
  • Solar Project Developers
  • Independent Power Producers
  • Utilities
  • Engineering, procurement, and construction (EPC) firms
  • Governments and energy regulatory agencies
  • Investor community




The US Distributed Energy Storage Market Increases Capacity

Several Key Factors Drive the Market’s Rapid Growth

Goals, Targets, and Mandates Drive Energy Storage in the US

Energy Storage Incentive Programs Secure Benefits for DESS Users

Net Energy Metering 2.0 and TOU Rate Affect Electricity Cost

The Leading US Markets for Distributed Energy Storage

Arizona Advances Legislation and Programs for DESS

California Leads the Energy Storage Market

Hawaii Accelerates DESSs with Multiple Programs

Maryland Innovates Ways to Use Energy Storage

Massachusetts Develops Energy Storage Standards and Targets

Nevada’s NV Energy Gives ESS Incentives

New Hampshire Initiates RPS with Legislation and Pilot Program

New York Expands Energy Storage Opportunities

Texas Begins to Make Way for DESSs

Vermont Creates Energy Standard Alongside Utility Innovation

New Developments Required for Other States to Catch Up

Interconnection Rules for Distributed Energy Storage Must Be Streamlined

Stakeholders Must Develop Wholesale Market Participation Models for DESSs

The Inclusion of DESSs to Energy Efficiency Programs Is Paramount

Stakeholders Must Value the Non-Energy Benefits of DESSs

  • Annual Installed C&I Building Energy Storage Power Capacity by State, US: 2020-2029
  • SGIP Storage Incentive Budgets
  • Maryland Energy Storage Tax Credit Program: 2018-2019
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