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Connecticut Incentive Program Encourages Businesses to Purchase Energy Storage Systems

  • Initiative aims to encourage commercial, industrial, and residential customers to install energy storage systems as part of long-term goal of decarbonizing Connecticut’s energy grid
  • Businesses can receive upfront and performance-based incentives per kilowatt hour toward covering the costs of installing such systems
  • Program is being developed, with the goal of launching in 2022

Summary by Dirk Langeveld

Businesses and industries in Connecticut will be able to participate in an incentive program to help offset the costs of establishing energy storage systems.

The effort, in line with the Equitable Modern Grid initiative created in 2019, works toward meeting a goal set in legislation passed this summer of creating an additional gigawatt of energy storage in Connecticut by the end of 2030. Governor Ned Lamont has also set a goal of having Connecticut’s energy grid by carbon-free by 2040.

The effort to improve energy storage capacity aims to address the issue of the intermittency of power supplied through wind and solar installations. The nine-year Electric Storage Program created by the Public Utilities Regulatory Authority will be administered by the Connecticut Green Bank starting in 2022.

Between 2022 and 2024, commercial and industrial customers can receive an upfront incentive of $280 per kilowatt-hour for small commercial entities, $250 per kilowatt-hour for large commercial entities, and $225 per kilowatt-hour for industrial entities. The incentives are capped at 50 percent of the electric storage system’s cost.

Annual performance-based incentives will also be available for commercial and industrial customers. These incentives will be based on the average power their energy storage system supplies to the grid during critical periods

Businesses are eligible to participate if they are an Eversource or United Illuminating customer connected to the grid. Incentives apply to new energy storage systems, although performance-based incentives are still available for systems installed before Jan. 1, 2022.

Residential customers are also invited to participate in the program, with incentives based on the size of their energy storage system and whether the customer is considered low- or moderate-income. The project incentives for residences are capped at $7,500.

The initiative aims to split deployment equally between residential and commercial customers. It establishes benchmarks of having PURA deploy 580 megawatts of storage capacity through these customers, including 100 megawatts by the end of 2024, an additional 200 megawatts by the end of 2028, and another 280 megawatts between 2028 and 2030. The Department of Energy and Environmental Protection will be responsible for deploying the remaining 420 megawatts of storage capacity.

Public comment on the program has yielded suggestions for additional incentives for certain entities, including small businesses (those with a peak load of less than 200 kilowatts) and customers who experience the most frequent or longest duration power outages due to storms. The Connecticut Green Bank will issue its final recommendations on additional incentives by Oct. 1.

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