As states ramp up storage targets, policy maneuvering becomes key
Dan Finn-Foley, energy storage expert at PA Consulting, discusses US energy storage deployment and statewide policies.
The article notes that in June 2021, Connecticut launched a new phase of its clean energy transition when Gov. Ned Lamont, D, signed a bill committing the state to a goal of deploying 1,000 MW of energy storage by 2030. That made Connecticut the eighth state to set a storage target, a key marker for the potential growth of energy storage to supplement wind and solar generation.
Getting to that goal – and the interim targets of 300 MW of storage by 2024 and 650 MW by 2027 – is another story, one that states across the country are tackling in their own ways. With lingering questions about storage's unique role on the grid and how best to balance emerging technologies, experts say that states' policies will be crucial to smoothing the path to broader deployment nationwide.
Connecticut's early focus will be on getting battery storage to homeowners and commercial customers, with an eye towards reaching historically underserved communities, said Josh Ryor, director of utility programs and initiatives for the state's Public Utilities Regulatory Authority (PURA). In a program launched in January, PURA, the Connecticut Green Bank, Eversource and United Illuminating will offer upfront incentives of up to $7,500 for residential customers to acquire energy storage, starting at $200 per kWh. Commercial and industrial customers will also be able to receive incentives of up to 50% of a project cost for storage installation. Customers who experience the longest and most frequent outages and those in low-income communities are eligible for additional benefits.
According to the Connecticut Green Bank, the incentives are in part modeled on the state's decade-old Residential Solar Investment Program, which led to more than 40,000 households adopting solar, with inspiration also coming from programs in New York, California and Vermont. "State incentives are vital to induce technology adoption, particularly in a nascent market," said Green Bank spokesman Rudy Sturk.
Sending a signal
Neighboring New York has set the country's most aggressive storage goal, with Gov. Kathy Hochul, D, announcing a target of 6 GW of storage by 2030. The state already has 1,200 MW under contract and has spent more than $300 million to incentivize new development. However, while utilities are working to meet state-mandated storage targets (despite many missing initial deployment targets set in 2018), the New York State Energy Research & Development Authority (NYSERDA) has acknowledged that barriers like interconnection delays, wholesale market uncertainty and a lack of monetization of some of the broader benefits of storage could impact deployment.
A new Energy Storage Roadmap is expected this summer, which a NYSERDA spokesman said would "ensure New York successfully hits this expanded goal by identifying research and development needed to further accelerate technology innovation, particularly for long-duration energy storage, while outlining ways to incentivize the private market to meet New York's ambitious clean energy targets." That could also include New York Independent System Operator recommendations on how to integrate storage onto the electricity grid.
Dan said the additional policy and study — the "logistics of bringing a new technology to market" — are what make the state-level targets so valuable. "You can give an archer a target, but with no arrows they're not going to hit it. Where we've seen energy storage targets lead to a mature sort of activity are places where the mandate or target is part of a broader climate or decarbonization goal, often backed up by regulatory muscle or policy."
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