New Jersey Proposes Financial Incentives for Energy Storage
New Jersey is set to introduce financial incentives aimed at promoting energy storage solutions next year. This proposal, revealed by the state’s public utility regulator, aims to support both grid-connected systems and those installed behind the meter.
These incentives are modeled after the state’s successful solar incentive program, known as the Successor Solar Incentive (SuSI) program. The New Jersey Storage Incentive Program, as it is called, aims to benefit standalone energy storage systems and solar-plus-storage setups that do not qualify for support under SuSI.
To share details on the initiative, the New Jersey Board of Public Utilities (BPU) is hosting an online stakeholder session to discuss the proposed incentives. Public comments will be accepted until December 18. The BPU plans to kick off the grid-connected incentive program early next year, with an additional behind-the-meter program following in 2026.
Energy Storage Goals
New Jersey has a target of achieving 2 gigawatts (GW) of energy storage capacity by 2030. This goal is a crucial part of the state’s larger objective to transition to 100% clean energy by 2035. Gov. Phil Murphy emphasized the urgency by signing an executive order last year that advanced the clean energy timeline from 2050.
The BPU interprets this storage requirement as needing New Jersey to obtain 2,000 megawatts (MW) of storage capable of four hours of continuous use, which translates to 8,000 megawatt-hours (MWh). The board noted that for systems designed for shorter discharges, their capacity would be adjusted accordingly.
The New Jersey Storage Incentive Program envisions different financial incentives for “grid supply” systems and those that are distributed, such as residential installations. Fixed annual payments will be provided through competitive bidding for front-of-the-meter systems. Depending on future data availability, these systems may also earn performance payments based on reduced greenhouse gas emissions.
For distributed energy systems, the BPU proposes fixed annual payments as well as performance-based rewards from local electric companies during peak demand periods. These initial payments could range from $150 to $300 per kilowatt, depending on the system’s size.
Moreover, systems located in economically disadvantaged areas may be eligible for additional upfront incentives, providing further financial relief.
The development of a performance mechanism for distributed systems is expected to take nearly a year after the start of the grid supply program, hence the planned 2026 launch. The program is envisioned to be similar to successful initiatives in Massachusetts and Connecticut but will allow New Jersey utilities to establish their own protocols for calls and payments.
Importantly, the incentives offered under this program will not prevent energy storage system owners from participating in the wholesale electricity market or from managing their electricity costs effectively.
In summary, New Jersey’s proposed initiatives represent a significant step towards enhancing energy storage capabilities in the state, ultimately facilitating the transition to cleaner energy sources.