Sorry, you need to enable JavaScript to visit this website.
Skip to main content
Home
    • Contact Panasonic
    • Save Page
    • Home
    • Green Living
    • Trends & Technology
    • Two Years In, New York Storage Market Has Grown ‘Faster Than We Expected’
    Back to Resource Center

    Two Years In, New York Storage Market Has Grown ‘Faster Than We Expected’

    • Contact us
      • Twitter
      • Facebook
      • Linkedin
      • Email
    Young family with daughters standing on quayside, side view

    Two Years In, New York Storage Market Has Grown ‘Faster Than We Expected’

    info@greentechmedia.com

    As costs decline and state incentives continue, New York's installed base of energy storage has surpassed expectations. This article from Greentech Media provides clarity on the Empire State's solar storage success. 

    In 2018, New York prioritized energy storage adoption as part of its clean energy transition strategy. Since then, energy storage development has moved faster than even the state's policy architects expected.

    A $280 million bridge incentive launched last spring to pay for some of the gap between the calculated value of energy storage and the money it can earn in the market today. The plan was to jumpstart the market ahead of Gov. Andrew Cuomo's 2025 target of 1,500 megawatts installed; then the incentives will taper off, so the industry meets the goal of 3,000 megawatts by 2030 subsidy-free.

    "Across the board, it's grown faster than we expected it would when we scoped out the incentive and roadmap," said Jason Doling, who oversees the energy storage program at the New York State Energy Research and Development Authority. "It was a good kind of wrong to have been."

    This storage industry growth is evident in the state's interconnection queues. There is no guarantee that everything in the queue will be built, but a significant spike in projects listed there speaks to the general increase in development activity.

    high voltage post,High voltage tower sky background

    Two years ago, fewer than 100 megawatts of storage projects had entered the queue for distribution utility interconnection, Dolin said. Now, there are more than 1,000 megawatts there. In the same time, storage projects in the New York ISO bulk storage queue jumped from 1,400 megawatts to 8,000.

    Among the smaller, distribution-level batteries, the biggest business driver is the VDER tariff, which stands for the Value of Distributed Energy Resources. This tariff applies to batteries with up to 5 megawatts discharge capacity, and pays the battery owner for the energy, capacity value and relief on the distribution system. It's highly bankable, because some of the components are locked in for 25 years, Doling noted.

    Declining costs equal more energy storage projects

    So far, 49 of 52 storage projects that received the smaller-scale bridge grant built their business model around VDER. Those projects maxed out the initial tranche of incentive dollars, which paid $300 per kilowatt-hour of storage capacity. But when the incentive declined to $125 per kilowatt-hour, that didn't halt development.

    "The projects still penciled because the costs were declining," Doling said.

    That's a positive sign that the incentive is working. It helped early adopters figure out the logistical requirements to build batteries in this particular state; when the financial support declined, the industry kept going.

    Fewer bulk storage projects have advanced, given the lengthier timetable for development, but the numbers are significant.

    NYSERDA has awarded bulk incentive dollars to nine projects so far, totaling 360 megawatts and almost 1,400 megawatt-hours. Those awards total $78 million, for projects that will cost $430 million.

    That means the incentive covers about 18 percent of the project cost on average. It's hard to make an apples-to-apples comparison, but that's a lower share than other prominent subsidies that apply to batteries. The federal investment tax credit for solar-paired storage covered 30 percent but stepped down to 26 percent this year; California's Self-Generation Incentive Program typically rebates around one-third of the cost of a customer-sited battery. 

    Air pollution

    Repowering old fossil plants with batteries

    Other policies are motivating large storage projects. New York investor-owned utilities, for instance, are required to procure at least 350 megawatts of bulk storage dispatch rights. And a new environmental rule tightening NOx emissions from peaker plants is forcing owners of older and dirtier plants to consider cleaner power sources.

    The queue for plant owners asking to add storage includes seven projects in Long Island totaling 600 megawatts, Doling said. In the section of the grid dubbed Zone J, which covers New York City, power plant owners filed for 16 projects totaling 1,040 megawatts.

    This type of retrofit may enjoy a newfound benefit. The Federal Energy Regulatory Commission recently ruled that energy storage systems in parts of southern New York are subject to a "buyer side mitigation" rule that raises the bid prices of plants that draw revenue from outside the markets. However, there is some ambiguity around whether repowering an existing peaker plant with batteries, as opposing to constructing a brand new storage plant, will trigger the BSM rule.

    New York officials and industry members are still assessing the impacts from the FERC ruling, which seems likely to make storage less competitive in the parts of the state where capacity is most valuable, an outcome at odds with state-level policy goals. But the long-term trend remains clear, Doling said.

    "There is a growing appetite for storage and storage paired with intermittents to meet peak demand," he said. "That won't change; that will only increase."

     

    This article was written by info@greentechmedia.com from Greentech Media and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

    Related Posts

    Modern passive house with solar panels and white roof for energy efficiency.
    Homeowner Insights

    6 Key Benefits of Creating a Solar-Powered Home

    Has switching your home to solar power become a no-brainer?
    Learn more
    asian family with one child having fun in the woods
    Homeowner Insights

    Why you should unify your home energy system in 2021

    Purchasing the components of your solar & storage system from a single brand has its benefits.
    Learn more
    Sunset over solar panels
    Trends & Technology

    Solar-plus-storage poised to become more financially attractive, but seasonal solutions remain key

    The current and future state of solar power and energy storage in America.
    Learn more
    Father and son hiking through the mountain at sunrise
    Trends & Technology

    4 home renewable energy predictions in 2021

    Panasonic's Dan Glaser gives his residential renewable energy predictions and outlook for 2021.
    Learn more
    Wooden blocks with the word ROI and green arrow up. High level of business profitability. Return on investment, invested capital, rate. Success. Growth. Analytics. Report
    Financial & Incentives

    How quickly will your solar panels pay for themselves?

    Understanding payback period and return on investment of your solar panel purchase.
    Learn more
    Businesswomen discussing by table in office
    Financial & Incentives

    How to accelerate solar adoption for the underserved

    As solar panels have become more affordable, there's no reason home solar has to be exclusive to upper income households.
    Learn more
    Caucasian family sitting in a teepee, reading stories with the flashlight in dark room with toys and pillows. Caucasian models. Home comfort, family, love, Christmas holidays, storytelling time.
    Homeowner Insights

    How Homeowners Can Prepare For Rolling Blackouts

    Common questions and answers about rolling blackouts and solar-powered homes.
    Learn more
    Older female farmer with granddaughter
    Sustainability & Environment

    Mayors unveil $60B plan to support Midwest energy transition

    As fossil fuel use continues to decline, Midwest officials want to build on the green movement foundation.
    Learn more
    Buildings & Roof Tops Of Bisbee, Arizona
    Trends & Technology

    A $100 million investment will fund the largest ‘virtual power plant’ in the U.S.

    Combining innovative thinking and technology, companies are redefining how energy can be saved, re-distributed and consumed more efficiently.
    Learn more
    Brush Fire Threatening Homes
    Trends & Technology

    Why are Home Batteries Becoming so Popular?

    More homeowners are choosing to install battery storage. Here are the reasons behind the growth.
    Learn more
    Happy mother talking to her baby while working at home. unpublished
    Financial & Incentives

    Financing Renewable Energy: It's Easier Than You Think

    As demand for home batteries surges, new financing options provide greater flexibility for homeowners.
    Learn more
    Foreman shows house design plans
    Homeowner Insights

    What to Expect During Your Solar Panel Installation

    Expert installers: Here's how we prepare your home for a successful solar installation.
    Learn more
    Back to Trends
     

    Thank you for your submission. A Panasonic representative will contact you.

    • About Us
    • News
    • Careers
    • Investor Relations
    • Social Impact
    • Contact Us
    • Do Not Sell My Data

    Get the Latest on Panasonic Trends

    Thanks for signing up!

    Connect with us

    • Twitter
    • Facebook
    • Linkedin
    • Instagram Link
    • Youtube

    Select Country/Language

    • United States - English
    • Canada - English
    • Canada - Français
    © 2020 Panasonic Corporation of North America. All Rights Reserved.
    • Privacy Policy
    • Cookie Policy
    • Terms
    • Panasonic Global
    • Consumer
    • Industrial
    Reviewed by Accessible 360
    Reviewed by Accessible 360