A home battery inverter set up.
A home battery set up. Credit: Dennis Schroeder / NREL

Thousands of dollars in incentives are now available to Connecticut residents who want to install electric storage devices in their homes or businesses.

Overseen by the state Public Utility Regulatory Authority, or PURA, the Energy Storage Solutions program is designed to deploy 580 megawatts of behind-the-meter battery storage throughout Connecticut by the end of 2030.

The batteries can act as a backup power supply in the event of an outage. But they may also be tapped by the electric distribution companies to feed the grid during times of peak demand, thereby helping to enhance grid resiliency.

The high-tech devices are pricey — the cost for a battery installed along with a new rooftop solar system generally ranges from an additional $14,500 to $17,000, said Sean Riel, national sales manager for residential solar and storage at Earthlight Technologies, in Ellington. But the program incentives are designed to offset much of that outlay over a 10-year period.

The program was developed over the past two years as part of PURA’s broader effort to modernize the electric grid. It also follows the legislature’s passage of a law last year establishing a statewide goal of deploying 1,000 megawatts of energy storage by 2030.

Officially launched in January, the storage program is paid for by ratepayers, and jointly administered by the Connecticut Green Bank, United Illuminating and Eversource, which operates a similar program in Massachusetts.

“The strategic deployment of energy storage is a critical element in our planned transition to a more renewable energy future,” said state Sen. Norm Needleman, a Democrat from Essex who co-chairs the energy and technology committee, in a statement announcing the program.

Contractors who install storage devices can help residential customers determine what size battery and how many batteries they might need. Here are four key aspects to know about the residential storage program.

1. Pairing a battery with solar yields the greatest benefits.

Linking a battery to a rooftop solar system is the most efficient use of the technology, said Sergio Carrillo, director of incentive programs at the Green Bank.

“During the day, the solar system provides energy to the home and charges the battery,” he said. “When the sun goes down, you can discharge the battery slowly. And then it charges again the next day. If you don’t have that solar system, you’re going to be charging the battery from the grid.”

When it comes to using the battery as a source of backup power, “if you’re concerned about shorter duration outages, getting a standalone battery might make sense,” said Christopher Rauscher, director of public policy for Sunrun, which has installed more than 28,000 paired solar-and-battery systems nationwide. “But for multi-day outages, you’ll have no ability to recharge your battery.”

2. The program’s upfront incentives are highest for low-income customers and customers in distressed municipalities.

For the first 10 megawatts of storage deployment, the upfront incentive for the average customer will be $200 per kilowatt-hour. That works out to a savings of about $2,700 for a customer buying, say, a Tesla Powerwall, Carrillo said.

A customer who lives in a distressed municipality, as defined by the state Department of Economic and Community Development, would receive just above $4,000. And customers who earn less than 60% of the area’s median income would get $5,400, Carrillo said. The incentive applies to both single-family homes and multifamily dwellings of up to four units.

Households purchasing more than one battery will receive an additional upfront incentive, up to a cap of $7,500 per project. (One Powerwall will provide enough backup power for a homeowner looking to keep the refrigerator, lights and well pump running during an outage, but likely not enough to back up the whole house, Riel said.)

Battery storage financing is available through the Green Bank’s Smart-E Loan program, as well as through some suppliers. Some companies, including SunRun, also offer leasing terms for a battery paired with solar. In those cases, the third-party owner will receive the upfront incentive, and adjust their pricing accordingly.

3. The utilities will pay you to allow them to dispatch power from your battery during anticipated periods of peak demand.

In return for the upfront incentive, program participants must allow Eversource and United Illuminating to passively dispatch power from their batteries between 3 and 8 p.m. on weekdays in June through August, said Josh Ryor, director of PURA’s Office of Utility Programs and Initiatives. For that reason, it’s important to go through a contractor or third-party owner, like Sunrun, who can set that up, he said.

Additionally, participants may choose to allow the utilities to actively dispatch power from their batteries during anticipated peak-demand days in the summer and winter. They will be notified by their utility the day before such an event and choose whether to participate. At the end of the year, participants will receive compensation for their participation, based on the average kilowatts used per event.

Ultimately, all ratepayers will benefit from this aspect of the storage program, regardless of whether they participate, Ryor said.

“By dispatching storage at critical hours throughout the year, you reduce the supply costs for everybody,” he said. “We’re reducing the amount of capacity we need on the system.”

4. The federal tax credit for solar can further offset battery costs.

The federal investment tax credit can be taken on the cost of a battery if it is being installed with a solar system, noted Rauscher, of Sunrun. The credit, which can be claimed on federal income taxes, is 26% for systems installed in 2022, and 22% for systems installed in 2023.

“So, for example, if your battery costs $10,000, you can receive $2,600 off on your taxes,” Rauscher said.

Lisa is a longtime journalist and native New Englander based in Connecticut. She writes regularly about housing, development and business for the New York Times. Her work has also appeared in the Boston Globe, CNBC.com, Next City and many other publications. She is the author of "Snob Zones: Fear, Prejudice and Real Estate." Lisa covers New England.