News Release

Coronavirus impact trims US behind-the-meter storage forecast by 31%

Wood Mackenzie has trimmed its forecast for US behind-the-meter (BTM) energy storage in 2020 by 31% as a result of the coronavirus crisis.

Key issues the industry is grappling with include commissioning/interconnection problems, sales challenges and supply issues.

Developers in the BTM storage and solar-plus-storage markets have noted that commissioning and interconnection are a major hurdle. Travel bans and shelter-in-place orders present in certain areas create significant hurdles for late-stage project implementation which requires on-site personnel.

"This has led to project delays and additional costs which, if they continue long enough, will lead to projects missing crucial deadlines - such as ITC qualification - which could destroy project economics.

"Some developers were forward-thinking enough to build longer delivery timelines into their contracts, giving them some wiggle room given delays from the original proposed commissioning date that they expect to be able to meet.

“However, we expect these problems to exacerbate as permitting agencies begin to pull back personnel and further government mandates limit individual movement and travel," said Brett Simon, Wood Mackenzie Senior Research Analyst.

Product supply remains less of an issue today, however that could change in the coming weeks.

Most North American storage developers source batteries from Asian manufacturers, which are ramping back up as coronavirus impacts abate in manufacturing hubs. As a result, North American developers are not concerned with battery supply. Delays have been on the order of weeks, rather than months, for product delivery.

Simon added: “However, a delay of even a few days for product delivery can cause reverberations on the commissioning/interconnection side, as having the right people onsite at the correct time is crucial for project completion and interruptions can add additional costs.

“There is some murkiness around the supply of components manufactured in North America, such as steel enclosures for larger scale non-residential projects. Developers remain unsure how much of an impact manufacturing slowdown in the US and Canada will have and continue to monitor the situation closely.”