Energy Storage Policy and Regulation

Clean Energy Group’s energy storage policy work is focused on the advancement of state, federal, and local policies that support increased deployment of energy storage technologies. Storage technologies unquestionably are critical to facilitate and accelerate the clean energy transition and to enable greater energy democracy for all communities. However, this transition can and should be accelerated by smart, state and community-level storage policies.

The next wave of America’s clean energy revolution will be built on a foundation of energy storage. States on the forefront of clean energy now face the emerging difficulties of how to incorporate higher and higher levels of intermittent, distributed energy sources into existing market and regulatory structures. Now, more than ever, there is a need to focus on how to scale up clean energy using energy storage as a tool to increase renewable penetration, while also making the electric power system more efficient and reliable.

Despite the many potential benefits of energy storage, there are numerous barriers that inhibit greater technology adoption, including information gaps about technology options, costs, safety, potential benefits, and market barriers; an absence of coordinated state and federal policies and programs to achieve cost reductions and encourage market uptake; and a lack of constancy across available incentives, financing options, and business models.

In fact, the state of the energy storage market and policy landscape is comparable to where the solar industry was about ten years ago, with no national consensus on incentives, little multi-state policy support, and few consensus policy pathways to achieve cost reductions and encourage market uptake. While solar and storage are different technologies, the policy trajectory that helped support the solar industry to achieve wide-scale adoption could inform how to scale up energy storage markets.

Through its energy storage policy efforts, Clean Energy Group is working with a diverse array of stakeholders, from environmental justice groups to industry experts, to establish the foundation for effective energy storage policies and programs across the country.

Examples of energy storage policy areas Clean Energy Group is currently working on include:

• Energy storage rebate programs. Clean Energy Group has developed a basic energy storage rebate program, similar to rebates currently offered in many states for behind-the-meter solar deployment. We have provided tailored versions this plan to both Massachusetts and Puerto Rico, where elements have been adopted and proposed in new policies and legislation, as well as to other states.
• Energy storage as an efficiency measure. Clean Energy Group has worked closely with Massachusetts energy agencies and advocacy organizations to advocate for the inclusion of energy storage in the state’s energy efficiency program so that energy efficiency funds can be used as financial incentives to buy down the upfront capital costs of storage technologies. Storage works along with solar and traditional efficiency measures to achieve greater overall customer energy efficiency, with the added dimensions of peak demand reduction and peak shifting. Our work in this area includes groundbreaking analysis on the benefits of energy storage, how storage can be evaluated in a cost/benefit test, and program design. We are providing similar support to Connecticut and are working to develop technical guidance documents for other states so all states with energy efficiency funding programs can incorporate storage within the list of eligible technologies for financial support.
• Storage procurement guidance. Clean Energy Group has provided guidance to Massachusetts in creating a utility energy storage procurement target, drawing on lessons learned from other states (such as California and New York) and advocating for principles such as limitations on utility ownership of storage and carve-outs for low- and moderate-income communities.
• Storage in existing policy and regulatory structures. Clean Energy Group has provided stakeholder input in state dockets regarding emerging policy and regulatory issues, including questions about who owns the attributes of behind-the-meter storage, how storage should be treated in net metering programs, how storage should participate in clean peak standards, the equitable disbursement of storage incentives, and the importance of considering storage as part of solar incentive programs.
• Utility customer storage programs. Clean Energy Group has tracked the emergence of utility customer storage programs (such as those now offered or in development in VT, MA, NH, RI, and CA) and has provided input to regulators and policymakers regarding the structure and benefit of these programs.