The new state battery storage incentive program represents an important step to improve access to energy storage technologies by low-income and underserved communities
A new analysis of multifamily affordable housing properties in Massachusetts found that participation in the state's battery storage incentive program, called ConnectedSolutions, significantly improves the financial viability of battery storage projects paired with solar (solar+storage) at affordable housing developments. For the majority of properties evaluated, battery storage would not be an economical investment without the ConnectedSolutions program. The findings are detailed in a report published by Clean Energy Group (CEG), titled ConnectedSolutions: The New Economics of Solar+Storage for Affordable Housing in Massachusetts, which represents the first independent, public analysis of the impact of ConnectedSolutions on the development of solar+storage systems for affordable housing properties.
The new ConnectedSolutions battery program represents an important step forward in advancing low-income and underserved communities' access to energy storage technologies.
Developed in the Commonwealth of Massachusetts with support from CEG, the ConnectedSolutions battery program was the first in the country to use state energy efficiency funds to incentivize customer-sited battery storage as a demand reduction measure. The performance-driven incentive program has now been implemented in multiple states throughout the Northeast and could serve as a nationwide model for accelerating the deployment of customer-sited battery storage, much as net metering policies catalyzed the uptake of distributed solar.
Based on an analysis of six multifamily affordable housing properties, the design of the ConnectedSolutions program helps dramatically transform the economic outlook for solar+storage in Massachusetts. Across all sites analyzed, internal rates of return on solar+storage investment improved by an average of more than 30 percent, net present values increased by an average of $80,000, and project simple payback periods decreased by one to three years with ConnectedSolutions. Participation in ConnectedSolutions also resulted in the ability to install larger, longer duration battery systems able to deliver greater bill savings to housing providers and greater energy resilience to protect vulnerable residents during power outages.
Additionally, ConnectedSolutions was found to improve the financeability of solar+storage projects by reducing uncertainty through offering five-year contracts to participating battery systems and consistent revenue opportunities based on utility signals. Because the program results in customer battery systems being dispatched at times that are most beneficial for the grid as a whole, the program also helps democratize the benefits of battery storage by delivering savings to all ratepayers, instead of just the battery owner.
"By focusing on regional demand and providing predictable returns, the ConnectedSolutions program model represents the single most important state policy development to advance solar+storage in affordable housing and other community-serving facilities to date," said Seth Mullendore, Vice President and Project Director at CEG. "The program allows any type of building, large or small, from industrial facilities to single-family homes, to generate steady returns from batteries."
"LISC applauds Clean Energy Group for its groundbreaking work that has laid the foundation for more equitable access to solar+storage for affordable housing, said Emily Jones, Senior Program Officer at Local Initiatives Support Corporation (LISC) Boston. "As we move toward an all-electric carbon-free future, battery storage is increasingly key to ensure everyone - particularly owners and residents of affordable housing - enjoys the economic, health, and resiliency benefits of this movement. LISC urges broadscale replication of ConnectedSolutions to ensure fuller access to resilient and affordable energy, while continuing to support policies that meaningfully increase baseline solar access for all Americans."
To inform state policymakers about the structure and benefits of the ConnectedSolution battery storage program model, CEG released a second report, titled ConnectedSolutions: A New State Funding Mechanism to Make Battery Storage Accessible to All. The report summarizes barriers to scaling up distributed battery storage, explains how the ConnectedSolutions program was developed in the Northeast, and discusses why the program has been successful. The report also presents a roadmap for how state policymakers can implement elements of ConnectedSolutions through existing energy efficiency plans and recommends federal initiatives that could support the adoption of this program across the nation.
"The ConnectedSolutions model provides states with the ability to quickly bring distributed energy storage to scale, and to use it to benefit all ratepayers," said Todd Olinsky-Paul, senior project director at CEG. "This is an important new model that can help state policymakers unlock the game-changing grid benefits of distributed solar+storage."
