Five years ago, you’d be hard-pressed to find a solar battery installation in Massachusetts – fortunately, that’s no longer the case. Thanks to declining storage costs and proven resiliency benefits, solar batteries are rapidly becoming a popular addition to solar panel systems all across the state. However, Bay Staters installing solar batteries today have more to look forward to than being able to keep their home running during power outages: a number of financial incentives available make solar batteries not only a great peace-of-mind purchase, but also a smart one for your wallet.
SMART battery incentive
If you’re considering solar in Massachusetts, you may already be familiar with the Solar Massachusetts Renewable Target (SMART) program. With this incentive, you can get paid extra for every kilowatt-hour (kWh) of electricity your solar panel system generates. But did you know that you can receive a higher incentive value by connecting your solar panel system to a battery?
Under the SMART program, homeowners who install an energy storage system are eligible for an extra “adder” to their solar incentive rate. Your adder depends on the specifics of your battery, as well as on the size of your solar panel system, but is ultimately an adder to the rate that you’re paid for each unit–kWh–of electricity your solar panels generate. The battery adder could be anywhere from an extra $0.0247 to $0.0763 per kWh of solar electricity. For an average 8 kW system in Massachusetts, this means an additional $237 to $732 in savings per year, or $2,370 to $7,320 over the 10-year duration of the SMART program payments.
Calculating the battery adder
We won’t sugar coat it; calculating your anticipated adder is…complicated:
But don’t worry about doing any manual calculations; to simplify things, the DOER provides a calculator that you can download for free on their website.
When you get down to it, there are five main factors that determine the value of your energy storage adder:
- The rated power capacity of your storage system (kilowatt, kW)
- The rated useful energy (or usable capacity) of your storage system (kWh)
- The storage hours at rated capacity (how many hours your battery can run at its rated power capacity, equal to rated power capacity / useful energy)
- The size of your solar panel system (kW DC)
- The current block tranche for the adder, determined by how many people have already taken advantage of the incentive
Importantly, you need to be able to run your storage system at its rated capacity for a minimum of 2 hours in order to claim this incentive. You’ll also need to discharge your battery at least 52 times a year to qualify (i.e., at least once per week).
Estimated SMART incentive values
Below is an example of the adder you could earn for pairing one of these popular battery options with an 8 kW solar panel system. As of May 2020, the SMART energy storage adder is in block 7:
SMART storage adder: 8kW solar panel system, block 7
|Battery||Rated power capacity (kW)*||Rated useful energy (kWh)||Storage hours||Storage kW as a % of Solar PV kW||Adder ($/kWh)||Estimated 10-year incentive benefit**|
|sonnen eco 8||4 kW||8 kWh||2||50%||$0.0376||$3,609.60|
|LG Chem RESU 10H||4.65 kW||9.3 kW||2||58%||$0.0391||$3,753.60|
|Tesla Powerwall 2||5 kW||13.5 kWh||2.7||63%||$0.0447||$4,291.20|
|Generac PWRCell 12||4.5 kW||11.4 kWh||2.5||56%||$0.0426||$4,089.60|
*Rated power capacity reflects eligible capacity given the minimum of 2 storage hours
**Assumes 9,600 kWh of solar energy production each year
Generally, batteries that can run at their rated power capacity for longer periods of time receive a higher adder rate. When comparing batteries with the same storage hours at rated capacity, you’ll receive a higher adder if your storage system capacity is a larger percentage of your overall solar PV capacity (i.e. 5 kW battery / 5 kW solar panel system = 100%).
If you’re a customer of Eversource or National Grid, you’re in luck: both utilities offer an incentive for their customers to install a battery under the ConnectedSolutions program.
The ConnectedSolutions program is a demand response program that pays you an annual incentive in exchange for allowing your utility company to access and use the electricity stored in your battery during times of peak demand.
For example, let’s say that temperatures in New England are higher than 100 degrees, and everyone’s blasting their air conditioning. Days like this puts a lot of stress on the grid because demand for electricity is higher than usual, and utility companies may have to turn on “peaker plants” (or temporary power plants) to meet customer needs. Doing so costs them and, consequently, you money. However, when they have the ability to access and distribute electricity from your charged battery during these times, they can use that electricity to curb their need for peaker plant generation, allowing them to save money and allowing you to reap the benefits of the ConnectedSolutions incentive.
In Massachusetts, you can receive $225 per kW during the summer events (i.e. times when they pull electricity from the battery) and $50 per kW during the winter events. If you choose to participate in this program, you’ll experience a maximum of 60 events during the summer, and 5 events during the winter. A single event can last no longer than 3 hours. Of course, your overall incentive benefit will depend on the number of events per year and how much power your solar battery can provide, but according to MassSave, “…a typical battery capable of a 5-kW continuous contribution during these events, the ConnectedSolutions program would pay $1,125 per year of participation.”
Keep in mind that not every storage system is eligible for this incentive: you can find a list of the current battery storage systems supported by the program on MassSave.
Also, if you’d like to learn more about the ConnectedSolutions program, check out our overview of the incentive.
Federal solar tax credit
In addition to the state-specific incentives listed above, your solar battery purchase is also eligible for the federal investment tax credit (ITC). In 2020, the solar tax credit allows you to claim up to 26 percent of the cost of your solar battery as a credit towards your federal taxes.
Importantly, standalone storage is not currently eligible for this tax credit: to claim this incentive for your battery purchase, you need to charge the battery with an on-site renewable energy resource (like rooftop solar). If you have a residential solar panel system and you charge your battery with electricity from the grid, you cannot take advantage of this credit.
However, commercial solar-plus-storage systems have a bit more leeway: if you’re installing energy storage on a commercial property, you can claim the tax credit so long as your storage system is charged by your solar panel system more than 75 percent of the time, and the exact value of the credit depends on how frequently you charge your battery with renewable energy. For example, if you charge your battery with solar 80 percent of the time, it is eligible for only 80 percent of the 26 percent ITC – equivalent to a 20.8% percent credit (80% x 26% = 20.8%).
For most homeowners, the ITC can help decrease the cost of a battery by an additional $3,000 to $4,000. You can learn more about the federal investment tax credit here.
Compare battery options on EnergySage
Looking to benefit from these storage incentives (and others)? EnergySage is here to help – sign up on the EnergySage Marketplace to receive up to seven custom solar-plus-storage quotes from installers located in the Bay State. If you’re interested in a particular battery system, simply note it in your account so that they can quote according to your preferences.