Dive Brief:

• Green Mountain Power (GMP), Vermont's only investor-owned utility, has filed a tariff extension to continue its popular programs incentivizing customer-owned storage, although the proposal faces questions over whether a tweak could imperil certain customer tax benefits.
• The Bring Your Own Device (BYOD) program started as a novel pilot in 2019 to get more households to adopt energy storage units by offering rate incentives. The program — combined with a second program that offers customers the chance to install Tesla Powerwall battery units for a monthly or up-front fee — has led to the deployment of at least 17 MW of storage in total, said Josh Castonguay, GMP vice president and chief innovation and engineering executive.
• The tariff extension filed with the Vermont Public Utility Commission would continue the program through September 2026 and also require that BYOD devices permit grid charging. However, renewable energy advocates and state regulators have cautioned that the requirement could mean customers are unable to take advantage of federal tax credits for solar coupled with energy storage without further adjustments to the design. 

Dive Insight:

GMP has touted BYOD and the Energy Storage System (ESS) programs as novel ways to expand the use of customer-sited energy storage to reduce peak energy use across its entire system and avoid using fossil fuel-burning peaker plants. Over the past year, both programs saved consumers across the system a combined $1.9 million by cutting power demand during energy peaks. The batteries were also able to provide value through grid operator ISO New England's frequency regulation market, which compensates participants for providing regulation, in a novel use of aggregated storage devices. Customers can receive upfront savings on the batteries based on how much power they store through the program. 

"Storage for us is the ultimate flexible tool for the grid," said Castonguay. "With just these small systems at homes across the network, we're looking at retiring our older peaker units. We see this as such an amazing resource for our customers and for the grid."

While the tariff extension has been well received, one small change has proven more difficult because of complex federal tax policy. GMP is proposing that customers who receive the BYOD incentive allow grid charging, which would allow the utility to ensure there is sufficient battery capacity to respond to peak events and keep the systems in play for utility-wide services. 

However, the federal investment tax credit (ITC) for solar – a 26% credit for installation – currently only applies to systems paired with solar power generation. Charging the batteries through the grid could make new battery systems ineligible, leaving customers to choose between the BYOD incentives or the ITC, said Jonathan Dowds, deputy director of Renewable Energy Vermont, an industry group that has worked with GMP on the program. 

"We're still at a point where we need to make this worthwhile for each individual consumer and my concern is that when it becomes an either-or choice, the benefits to the consumer may not be as robust," Dowds said. "The incentive structure needs to be in place so people will pursue it."

House Democrats approved an ITC for standalone storage projects as part of the Build Back Better budget reconciliation package, but that provision did not make it into the current version that has stalled in the Senate. Advocates are hopeful that a standalone ITC could pass as part of a separate climate bill or energy tax package. 

In the interim, however, GMP and state regulators say they are working on a solution. Castonguay said there could be provisions that allow customers to choose how to take advantage of the multiple incentives. In a comment on the extension request, the Vermont Department of Public Service said that discounted "solar-recharge-only" tariffs or a performance-based incentive could be considered, "but these may not be very compelling options for customers." Ultimately, the state said, the condition "appears to be reasonable" and will rely on customer education.

Based on the success of BYOD, other utilities have adopted similar incentives for residential storage with an eye towards peak reduction. The Vermont Electric Cooperative offers a monthly bill credit for home storage devices and New Hampshire's Liberty Utilities launched its own pilot in 2019 combining home storage with time-of-use rates. Dowds said that further extensions in Vermont could allow even more experimentation and applications that allow utilities to see how storage can best be deployed. 

"People are continuing to innovate in this space and we're excited to find the best way to promote these systems," he said.