The Gold Rush of Energy Storage
Energy Storage is a Growing Market
The panelists shared that in recent years they have seen increased customer demand in the energy storage market in all regions of the nation and are most popular in Texas and California. Now that energy storage is becoming economical, Mortenson has seen the demand for energy storage rise alongside the areas building large renewable projects.
Although the energy storage market here in Minnesota has not yet caught up to those states who have gone all in, we’ve learned among our panelists that it is gaining more interest. Brian Allen alluded that at All Energy Solar, although they had not initially marketed it, they have seen the growth of the market in real time since they started offering electric energy storage in 2016. More recently, All Energy Solar has seen a 10% attachment rate for their own projects based in Minnesota.
As expected, some of the anticipated roadblocks within energy storage are related to supply chain and workforce development. Once the full effect of the Inflation Reduction Act (IRA) comes into play, supply chain challenges in all areas of the energy storage market will be amplified. This in turn will also affect the workforce and labor market creating demand for both front and back end jobs such as electricians, engineers, and policy specialists. More regionally, Midcontinent Independent System Operator (MISO)’s delay in aggregated Distributed Energy Resources (DERs) creates a call to action for there to be a conversational space in the sharing knowledge and innovation of energy storage and discussing incentives for energy storage implementation.
Aggregation Future of Energy Storage
Looking forward, aggregation creates a promising future for the energy storage market and DERs to be explored to its fullest potential. Aggregation has already made its way into states such as Illinois, Texas, and California and has steadily picked up momentum. All Energy Solar has seen a bigger uptick in storage adoption in Massachusetts where a solar battery storage incentive program, ConnectedSolutions, is offered. Through this program utility providers, National Grid and Eversource, reward their residential and commercial customers for reducing energy provided by the grid during peak demand times.
Although the Midwest currently doesn’t have conversations around aggregation as it is not yet implemented or offered due to MISO constraints, Rao Konidena believes in getting ahead of the game now by advocating the need to aggregate for more storage on the grid will allow for emissions reductions, renewable integration, and reduced costs to customers. With the 2030 lead time for MISO to upgrade their systems and integrate DERs, this may give Minnesota an opportunity to explore steps toward aggregation.
Opportunites for Growth
“The Inflation Reduction Act (IRA) will positively help drive demand for energy storage.” -Mike Patterson, Trane Technologies
In August, the passing of the Inflation Reduction Act (more on the IRA here) with a $370 billion investment will push the U.S. toward prioritizing climate goals. Provisions in the IRA will lower consumer energy costs, decarbonize the economy and promote American energy security and domestic manufacturing.
The IRA contains many various benefits, like tax credits or direct pay. For the installation of standalone energy storage, there will be a tax credit of 30% available for the first time. Panelists continue to keep a close eye on how the IRA will positively impact the energy storage market within the energy industry and are hopeful for what’s to come. As more information is released, the IRA will undoubtedly push energy storage further into the gold rush.