Energy Storage Solutions Program

Summary

Note: The MW approved through this program will be counted towards the state's energy storage targets.

The Energy Storage Solutions Program provides incentives to residential and commercial customers to install energy storage systems. The program is administered by the Connecticut Green Bank, though the incentives are provided through the state's utilities, Eversource and United Illuminating. The program will run for nine years, from 2022 through 2030.

The program has a cap of 580 MW, spread across three tranches. Tranche 1 is open for the first three years of the program -- 2022 through 2024. Tranche 2 is open from 2025 through 2027. The Tranche 1 capacity for the Commercial incentives reached capacity in March 2023, and Tranche 2 reached capacity in May 2024, so Tranche 3 has opened early. Starting in 2025, the existing tranches were reallocated to account for the high commercial interest and low residential interest. Instead of each customer type receiving 290 MW, residential will receive 150 MW across three tranches and commercial will receive 430 MW across four tranches.

Program Deployment Targets

Upfront Incentives

The program offers upfront incentives for purchasing and installing an energy storage system, up to 50% of project cost. Residential incentives use a declining block structure; as more systems are approved, the incentive value decreases. Systems that service underserved communities or low-income customers can receive a larger incentive, and this incentive is not subject to the declining block structure. There is also an adder for systems that serve customers located on grid edge.

Residential Upfront Incentives (Tranche 2)

Starting in 2025, commercial incentives also use a declining block incentive, with the value of the incentive based on the size of the system: small, medium, or large. There is also an adder for systems that service priority customers, i.e. customers located on grid edge, critical facilities, small businesses, and customers replacing a fossil fuel generator. Tranche 3 is missing 13.9 MW, as Tranche 2 was overallocated by that amount.

Commercial Upfront Incentives (Tranche 3)

Customers who applied in Year 1 of the program (2022) did not receive the priority customer adder; instead, they could participate in the forward capacity market. Starting in 2025, these participants can trade their market participation in to receive the adder, as long as the system has not yet energized.

Also starting in 2025, energy storage aggregators and multifamily residential projects can apply for commercial incentives. Multifamily residential projects must equitably share the resilience benefits of the system with tenants, instead of sharing the monetary incentives. Multifamily residential customers can install a front-of-the-meter system if a behind-the-meter system is too cost prohibitive.

Performance Incentives

The program also offers a per-kWh performance incentive. Under the performance program, the utilities can dispatch a system's stored energy during appropriate events in both the summer and the winter. In return, the customer will receive an annual lump sum. The performance incentive is available on a 10-year contract. Customers can receive a maximum of $225/year in the first five years and a maximum of $130/year in the last five years.

Performance-Based Incentives

If a customer does not meet the base participation requirements (80% of energy dispatched across 90% of dispatch hours), then a portion of their performance incentive will be rescinded (called a "clawback provision"), proportional to their underperformance.