New Jersey Board Releases Updated Proposal for Energy Storage Incentive Program

The New Jersey Board of Public Utilities has released a proposal for the 2024 New Jersey Energy Storage Incentive Program creating two segments for incentives: front-of-the-meter or “grid supply” projects and behind-the-meter or “distributed storage” projects.  The state expects to launch the grid supply segment of the program in 2025 and the distributed storage segment in 2026.

The updated proposal reflects stakeholder input received on the 2022 proposal. The two categories of projects, patterned after the Successor Solar Incentive, or SuSI, Program, will have different frameworks. The SuSI Program, established in 2021, is the state’s long-term solar program for providing incentives to new solar generation facilities connected to the transmission or distribution systems of public utilities or local government units.

Under the new proposal, behind-the-meter projects would receive fixed incentives through annual installments and relevant performance incentives for reducing on-site load or adding additional power to the grid when required by the utility. Grid supply projects would initially only receive a fixed upfront payment through an annual competitive solicitation. Emission-based performance incentives are deferred to a later date for grid supply projects until more data is available. The proposal to award fixed incentive payments for grid supply projects through an annual competitive bidding structure marks a change from the administratively determined fixed incentive plus performance incentive structure proposed in the 2022 proposal.

For grid supply projects, the 2022 proposal called for emissions-based performance incentives with no annual competitive bidding. The original proposal also only included stand-alone storage projects, while the new straw proposal includes solar-plus-storage projects not covered by the SuSi program. Only projects that commence operations after the board’s order initiating the energy storage incentive program can claim incentives.

New Jersey is determined to build an effective, long-term energy storage that would bolster electric grid reliability and clean energy transition. The state has a statutory mandate to achieve 600 megawatts (MW) of installed energy storage by 2021 and 2,000 MW by 2030.

Energy storage projects are crucial to New Jersey’s decarbonization strategy and clean energy transition. Not only do the energy storage incentives help to balance high loads, but also provide more stable power from intermittent renewable sources such as solar and wind.

In addition to New Jersey, other states such as California and New York are also ramping up energy storage initiatives and setting ambitious storage targets. The U.S. Energy Information Administration expects rapid growth in the country’s energy storage capacity with 36 GW added by the end of 2028.

The board will hold a virtual stakeholder meeting on Nov. 20 to present the updated proposal and associated draft rules.