New Jersey's Board of Public Utilities approved 13 behind-the-meter energy storage projects across the state to boost resiliency at critical facilities under its Renewable Electric Storage Incentive. The projects total nearly 9 megawatts.

Most of the awardees are schools, which often serve as shelters in emergencies. (New Jersey was one of the states hardest hit by Superstorm Sandy.)

 

“These awards keep up with the spirit of programs on the East Coast with emphasis on resiliency and this notion of community benefit, not just individual customer benefit,” said Ravi Manghani, senior energy storage analyst with GTM Research. New Jersey also launched a $200 million Energy Resilience Bank last year, and some of the projects could involve energy storage. 

As part of the storage solicitation, the systems will have to be integrated with renewable energy resources that are “ready to build.” The energy storage systems can only be charged by on-site fossil fuel generators for short-term charging to enable ancillary services.

Given the strict program requirements, Manghani said the projects should come on-line in the next 12 to 18 months. Those that require more than a year will receive only 90 percent of the awarded incentive.

This solicitation in New Jersey highlights GTM Research’s prediction of huge growth for this class of energy storage. The past two years have seen a combined 8.5 megawatts of behind-the-meter storage installed in the U.S., according to Manghani’s recently published U.S. Energy Storage Monitor report. 

“These awards are good examples showcasing the use of energy storage to integrate more renewables on the grid, provide resiliency and enable the hosts to reduce demand charges or participate in PJM's ancillary services market," said Manghani.

New Jersey is part of a cluster of Northeast states investing in energy storage in response to Superstorm Sandy. Massachusetts awarded more than $25 million for various microgrid projects, many of which will include battery storage.

Connecticut awarded nearly $3 million for a microgrid that will have 100 kilowatts of battery storage. New York has various projects that will invest in behind-the-meter energy storage, and ultimately will move toward market-based deployment of customer-owned storage as part of its Reforming the Energy Vision plan.

The Northeast investment is dwarfed, however, by California’s $415 million for behind-the-meter generation including wind, fuel cells and energy storage. Most of that, however, is expected to go toward storage. There are already 50 megawatts' worth of projects in the pipeline.

It’s not just state mandates driving behind-the-meter storage. Partnerships, especially with solar providers, will be another key to moving the sector forward in coming years.

In the near term, the action may be on the coasts, but when it comes to energy storage incentives, keep an eye on Texas as well.