There has been much (deserved) discussion on federal standalone energy storage incentives passed in the Inflation Reduction Act, but a new state-level incentive is taking shape in New Jersey. Yesterday, the New Jersey Board of Public Utilities (“BPU”) released its awaited New Jersey Energy Storage Incentive Program (“NJ SIP”) Straw Proposal in an NJBPU Notice along with a schedule of virtual stakeholder meetings in October and November. The program will be formalized through a final BPU Order to ultimately support NJ’s statutory mandate to initially achieve 600 megawatts of installed energy storage in 2021, growing to 2,000 MW by 2030. Comments on the Straw Proposal are due by December 12, 2022.
As this Straw Proposal will likely guide the contours of the final program, below are some preliminary details on what sponsors and financing parties can expect:
Notably, the NJBPU Notice states that the incentive programs are intended to permit private investors to own and operate the energy storage devices, as well as allow them to (1) “stack” revenues from the wholesale electricity market, (2) utilize the behind-the-meter resource to actively manage energy usage at the distribution level and reduce electricity costs, and (3) participate in a Distributed Energy Resource (“DER”) Aggregation service, when available.
Lastly, it should be noted that the Straw Proposal caveats that the creation of federal tax incentives for standalone storage in the Inflation Reduction Act “may warrant moving incentives up or down and [the NJBPU] seeks comment on where initial incentives should be set.”
This is only the Straw Proposal, which will go through a variety of stakeholder discussions, but this is a positive development for energy storage deployment in New Jersey. Interested parties can review the Notice for information on the stakeholder meetings (including registration), which are scheduled to occur beginning on October 21 through November 14.