Massachusetts sweetening the deal for energy storage systems
Battery units in Longmont, Colo. Photo: Aaron Ontiveroz/The Denver Post via Getty Images
A new $3.5 million energy storage system went online last month in Ashburnham, Mass., continuing a statewide expansion of systems designed to ease pressure on the electric grid at times of peak demand.
Why it matters: In January, Massachusetts became the first state to offer incentives for battery systems, with the approval of a $2 billion state energy efficiency plan. The program is expected to support the installation of 30–34 MW of storage capacity during its 3-year term, on top of 190 MW from other operating and planned projects.
How it works: Behind-the-meter energy storage is typically paired with renewables, allowing for the capture of excess wind or solar energy. The stored energy can be used during periods of peak demand — to alleviate strain on the electric grid — or when the wind is not blowing or the sun is not shining.
Details: The plan draws on recommendations from an economic study performed by the Applied Economics Clinic. Its reports, presented to the state's Department of Energy Resources and Energy Efficiency Advisory Council, concluded that the cost benefits of battery storage should qualify it for efficient energy incentives.
- Both commercial and residential customers will be able to sign up for 5-year contracts with their utility provider for new battery storage installations.
- At the end of each year, incentives will be paid out based on how much the storage system was able to offset use of the grid.
What to watch: Massachusetts has one of the country's largest energy efficient budgets, at $620 million a year — alongside California ($1.4 billion) and New York ($450 million).
- The state is making good progress toward its energy storage goals: 200 MW by 2020 and 1000MW by 2025.
- As of April, New York has offered $280 million in incentives to energy storage companies.
- As these states continue to realize the benefits of behind-the-meter storage, others may begin to include batteries in their own incentive policies.