Location, Location, Location: An Economic Comparison of Large-Scale Batteries Installed in Front of vs. Behind the Meter in Massachusetts

This report compares the costs and benefits of one utility-scale, front-of-the-meter (FTM) battery system versus five commercial-scale, behind-the-meter (BTM) batteries of the same aggregate cost in Massachusetts. The report, commissioned by Clean Energy Group for the Cape and Vineyard Electric Cooperative (CVEC), provides useful information to help CVEC decide between two possible ownership models for future energy storage procurement, while also providing a more general cost/benefit comparison between FTM utility-scale and BTM commercial-scale batteries. In this analysis, the larger FTM battery is considered a community storage project, owned and operated by CVEC on behalf of its constituent municipalities. The municipalities would share in any net profit or cost savings realized over the operational life of the system. The BTM batteries are sited at municipal facilities, where they can provide backup power to the host facility when the grid goes down due to extreme weather or system failure. 

Results show that the FTM system has a better economic profile, even though Massachusetts has some of the most supportive energy storage incentives and subsidy programs in the country for BTM batteries. In almost any other state, the BTM batteries would have had fewer revenue opportunities, meaning that the FTM system is likely to “win” economically by an even greater margin in other states. 

While this analysis considers only monetizable benefits (e.g. cost savings and revenues the battery systems can realize in current markets), the report also discusses the importance of non-monetizable benefits of BTM energy storage, such as providing backup power to the host facility during grid outages. It provides a cost estimate for this service—a “resilience premium” associated with BTM energy storage sited at municipal facilities to provide a community resilience benefit. 

This report was prepared by American Microgrid Solutions, under contract to Clean Energy Group, for the Cape & Vineyard Electric Cooperative.