TRENTON – The Senate Environment and Energy Committee advanced legislation sponsored by Senators Bob Smith and Linda Greenstein that would establish a pilot program to provide incentives for owners of energy storage systems.
In essence, energy storage systems are a technology that stores generated energy for use at a later time. For example, solar panels and wind turbines produce energy when the sun is out or when there is sufficient wind. Absent the correct conditions, they do not produce the amount of energy that may be needed to satisfy the demand for electricity at a given time. Energy storage systems allow surplus energy to be captured and stored for later use, such as when demand is particularly high or when other conditions, like lack of sun, reduce the amount of energy that can be generated.
“The benefits of energy storage systems cannot be understated. They enable wider application of clean, renewable energy, they can be used to protect from power disruptions at hospitals or personal homes, and they can reduce energy costs by charging during low-demand, low-cost hours and discharging when demand on the wider electrical grid is higher,” said Senator Smith, the Chair of the Environment and Energy Committee. “They are an absolutely essential component of our transition to clean energy, and we should do everything we can to support their deployment.”
“Energy storage systems have a litany of benefits, and represent a promising way to reduce energy costs as we transition away from fossil fuels,” said Senator Greenstein (D-Mercer/Middlesex). “This bill will help incentivize their implementation and expansion, and in doing so help us accomplish our wider clean energy goals.”
The bill, S-225, would direct the Board of Public Utilities (BPU) to establish a pilot program providing upfront and performance incentives for owners of energy storage systems. These incentives would be applicable for both customer-sited systems and utility-sited systems. Customer-sited systems are usually smaller, owned by the customer, and provide power only to the customer. Utility-sited systems, meanwhile, usually have higher capacity and are interconnected to the transmission system on the utility side of the meter for distribution to the wider grid.
Furthermore, the BPU would be required to allocate at least $60 million per year, for the duration of the pilot program, to support the incentives for owners of energy storage systems. The BPU would have 180 days from the effective date of the bill to establish the program, and would then be required to submit a report to the Governor and the Legislature within a year of the pilot’s establishment that details the recipients of the incentives, the cost, and an evaluation of the program’s success in supporting the expansion of energy storage capacity.
The bill was advanced in a 3-2 vote.