New policies in many states as well as the federal level are encouraging the adoption of battery storage, a cutting-edge technology with the ability to reduce energy costs and emissions while enhancing reliability and resilience in the face of extreme weather events. Quietly, Connecticut has emerged as a leader in making sure that the deployment of these resources benefits not only individual homes and businesses but also the electricity grid we all depend on.
The Energy Storage Solutions (ESS) program, administered by the Public Utilities Regulatory Authority (PURA) and funded by the Connecticut Green Bank, is a tremendous opportunity for homeowners and businesses to be a part of this win-win proposition. Scale and our partners have already helped a number of Connecticut businesses take advantage of this opportunity, and we’re pleased to learn that funding has been increased so that more businesses can do the same.
However, the first tranches of the program were used up ahead of schedule, so it’s important to act quickly if you want to take advantage of this opportunity. Here’s how these battery storage incentives can help your business save on energy costs everyday, while also providing invaluable energy services to you and your community during grid emergencies.
The Value of Batteries for Connecticut Businesses
Most obviously, batteries offer value as a source of reliable backup power during an outage. Losing power almost always means losing revenues, and potentially a lot of revenues – for instance, you’re operating a business with sensitive manufacturing processes, or are a supplier of food products that could spoil. According to the Lawrence Berkeley National Laboratory’s Interruption Cost Estimate calculator, the average medium-to-large sized Connecticut business loses $72 for every kilowatt-hour lost to an outage, and $22,000 on average each time the power goes out.
The ways that batteries can enable Conncticut businesses to save money every day are less obvious, but they typically generate even more economic value. Businesses’ electricity bills are not only based on how much electricity they use but also how much they use at one time and when they use it. These additional fees include demand charges based on the maximum amount of energy they use over a given hour every month, ICAP charges based on their energy use during the hour of peak demand on the grid every year (e.g. a hot summer day), and potentially time-of-use rates that charge more for energy based on the time of day when it’s used.
Batteries can reduce all of these costs by storing energy from the grid when a business’s demand and/or prices on the grid are low, and then using that energy to replace the use of the utility grid when demand or prices are high. By leveling out demand over time, a practice which is often referred to as “peak shaving,” and by shifting grid use to low-cost hours of the day, batteries can enable businesses to save tens or even hundreds of thousands of dollars a year – if they are properly optimized to account for its energy use patterns and utility rate structures.
The Value of Batteries to the Connecticut Grid
Connecticut isn’t incentivizing batteries just to support individual businesses, of course – grid reliability issues are a challenge for the entire state, and batteries can help address them in multiple ways. While the grid has always been vulnerable to weather-related outages – for example, a storm knocking a tree into a power line – climate change is making extreme weather events more frequent and more dangerous. According to a recent study, 80% of power outages since 2000 were caused by severe weather events, and the number of these weather-related outages has doubled over the past decade. Connecticut is no stranger to these types of events, including power outages caused by late-December winter storms in both 2022 and 2023.
Beyond these dramatic instances of weather-related outages, rising temperatures are also putting the grid under increasing, daily stress for longer stretches of the year. In many northeastern states, the aging grid is struggling to meet surging electricity demand from homes and businesses cranking up their air conditioners to get through our increasingly sweltering summers, forcing grid operators to turn to expensive and also-aging fossil fuel peaker plants – which are themselves increasingly vulnerable to outages and maintenance issues. If sufficient supplies can’t ramp up to meet these demand peaks, brownouts or rolling blackouts can result.
Connecticut’s policy design encourages batteries incentivized under this program to help support the grid during these times of high demand. In addition to providing an up-front incentive to reduce the capital expense of the battery, ESS offers additional performance incentive payments for businesses that allow their battery systems to provide energy to support the grid during peak demand times of the year and other grid emergencies. Rewarding batteries for showing up when they’re most needed is a win-win for business owners and the grid, and a great opportunity to showcase the potential of battery storage technology to benefit us all.
Batteries installed under the program are also required to have the ability to operate independently (or “island”) from the grid during outages. In addition to providing multiple hours of backup power for their own operations, some businesses may wish to use this capability to serve as resilience hubs for their communities. For example, if a hurricane knocks out power along the coast, grocery stores with backup power can be a lifeline for area residents in need of air conditioning, fresh food, and a place to charge their phones.
Step Up With Help From An Industry Leader
If the ESS program seems almost too good to be true – you can save money for your business everyday while also getting paid extra to step up when the grid needs you? – that’s just a sign of a smart policy. The only catch is, battery systems aren’t exactly a plug-and-play technology like a refrigerator. Designing a system that’s best for your business, securing the ESS incentives, optimizing its charging and discharging to maximize your savings, equipping it with islanding capabilities, and ensuring it responds when called upon all require more expertise than a typical electrician can provide.
And, as noted above, the clock is ticking to take advantage of this incentive.
That’s why so many businesses receiving incentives under the program are working with Scale, a national leader in on-site energy systems with deep roots and experience in the northeast. Scale not only has expertise in system design and experience navigating the incentive process – we also have financing available that allows businesses to install these battery systems for $0 down, enabling them to start saving on electricity costs from day one.
These incentives won’t last forever – again, each of the first two rounds of the program ran out of incentives ahead of schedule. So, if you have a Connecticut-based business, you owe it to yourself to look into the ESS program ASAP. It’s an opportunity to be a part of Connecticut’s quietly effective technology leadership story and leverage battery storage and smart policy to improve your bottom line, enhance your resilience, and help your community. Our experts can help quickly evaluate your opportunity and reserve your incentive – contact us at info@scalemicrogrids.com today!