Last year was the first year we saw installations of grid-connected battery energy storage decline. A total of 2.7 GW of grid-connected battery energy storage was deployed globally in 2019, compared to 3.7GW in 2018.
While the market was ready to accelerate again in 2020, the outbreak of the global COVID-19 pandemic and subsequent economic shock have significantly impacted the short-term outlook for energy storage.
Revising down our forecast by 19%, IHS Markit expects installations to total 4 GW / 10.9 GWh in 2020. While demand in the residential and commercial and industrial (C&I) segment will particularly suffer over the coming months, the overall market will still grow by 49% compared to 2019.
COVID-19 pandemic disrupts the global stationary energy storage market
Initial estimates show that the economic downturn caused by the coronavirus may be very severe. Preliminary results from IHS Markit’s Economics and Global Risk team’s latest global forecast update indicate a global GDP decline that will be far worse than the contraction in 2009”.
This highlights the wider financial difficulties in the coming months as this is not a crisis purely defined by temporary restrictions on workforces and logistics, but increasingly by an economic collapse of unprecedented proportions.
The energy storage industry is still in an early stage of rapid development. Thus, the epidemic should have a limited impact on the overall market development in 2020. As the fundamental need for the technology underpins strong project pipeline and the existing steep growth curve. Growth in 2021 and beyond will thus continue to accelerate.
Across the world, the effect of the COVID-19 pandemic will be diverse. Despite severe economic challenges the United States will be the largest global market installing just over 2 GW in 2020 – with a drop in behind-the-meter demand and project delays in the front-of-the-meter (FTM) market causing the forecast to be lowered by 18%.
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