Projects linking battery storage to PV developments are booming in the US renewable energy market, says a new report on the sector.

US developers plan to bring online 5.3GW of battery power capacity at new and existing generation plants in 2022, nearly twice as much as last year, while another 4.9GW of stand-alone additions are planned, according to latest data from S&P Global Market Intelligence.

Batteries tied to solar arrays accounted for 77.5% of storage capacity completed at generation facilities in the first quarter, followed by natural gas (16.4%), wind (4.1%), and others (2%) that include fuel cells, hydro, and oil.

Slate Solar, which combines a 300MW PV system with 140MW of lithium-ion batteries designed to discharge for up to four hours, was the largest hybrid project among more than a dozen to added to the US electric grid this year through March. It is owned by an affiliate of Goldman Sachs.

Solar is also dominating the 9.7GW of co-located battery power projects announced for 2023, according to the report.

The data “largely reflects less speculative projects in the near-term development pipeline,” wrote Susan Dlin and Garrett Hering, the authors of Nearly 15GW of Batteries Planned at US Solar, Wind, Gas Plants in 2022, 2023.

The growth of solar-battery hybrids is driven by federal tax credits that apply to energy storage when charging on PV, comparatively low contract prices, construction cost savings for combined assets, and the need for flexible generation.

US grid operator interconnection queues included 280GW of solar and 208GW of storage entering 2022, the US Department of Energy’s Lawrence Berkeley National Laboratory said in a report last month, citing “staggering” developer interest.

Looking ahead through this year and 2023, S&P’s data shows that California leads all US states with 8.9GW of planned co-located energy storage capacity, followed by Texas (5.5GW), Nevada (4.9GW), and Arizona (2.7GW).

Texas, however, leads all states for planned stand-alone energy storage with (8.4GW), then California (6.8GW), Nevada (3.1GW), New York (1.7GW), and Utah (1.2GW).

Supply chain shortages

The report cautions that project developers will need to overcome challenges tied to “considerable battery supply chain shortages” that delayed significant capacity additions in 2021.

Earlier this month the White House announced $3.1bn in federal grants to companies that build plants in the US to process the basic components of batteries into finished products. The minimum grant will be $50m which will require the same amount of investment from the companies awarded grants.

The move is aimed at helping companies accelerate the processing of existing inputs necessary to fabricate lithium-ion batteries including cobalt, graphite, and lithium, and better overcome future supply chain disruptions, not to incentivise production of those minerals if located domestically.

The $1.2trn bipartisan Infrastructure Investment and Jobs Act did earmark millions of dollars in funding to improve the federal permitting process for critical minerals, which are key inputs for batteries.