Upfront Incentives for Residential and Commercial Energy Storage Systems
Residential Energy Storage Incentives
- Calculation Basis: Residential incentives are often calculated based on the usable energy capacity (kWh) of the battery system. The incentive can be determined by one of three formulas: the energy capacity multiplied by a step rate per kWh, 50% of the total project cost, or a maximum per project incentive cap (e.g., $16,000).
- Incentive Rates: Incentive rates can vary by location. For instance, some programs offer different rates depending on income levels. In Connecticut, during the first incentive step, non-low-to-moderate-income (non-LMI) households might receive $250 per kWh, while low-income households could get $600 per kWh.
- Example Program: In Connecticut, the upfront incentive for residential energy storage starts at $200 per kWh, with a cap at $7,500.
Commercial Energy Storage Incentives
- Calculation Basis: Commercial incentives often focus on both energy capacity and the system’s ability to reduce grid stress during peak demand periods. They may provide rebates or tax credits based on system size or specific contributions to grid stability.
- Incentive Structure: Commercial incentives may offer a flat percentage of the upfront cost, such as a 50% reduction for systems connected to the grid and used for peak demand management.
- Programs and Focus: Commercial programs frequently emphasize the role of energy storage in peak demand management and enhancing grid reliability. Incentives are designed to help businesses offset significant capital expenses associated with deploying these systems.
Comparison
- Residential incentives tend to be more nuanced, with eligibility and amounts influenced by factors like household income and available capacity blocks.
- Commercial incentives focus on grid stability and cost reduction for businesses, often offering substantial upfront support or tax credits to encourage adoption.
Overall, while both types of incentives aim to encourage energy storage adoption, residential incentives are more sensitive to socioeconomic factors and program capacity, whereas commercial incentives prioritize grid management and cost efficiency.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-upfront-incentives-differ-between-residential-and-commercial-energy-storage-systems/
