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Solar battery incentives in Vermont

Vermont is well known for all of its seasons, but especially for its harsh winter storms (trust me, I grew up there). Historically, many Vermonters have relied on diesel-powered generators to keep their homes running during a power outage, including those regularly caused by mid-winter ice storms. However, generators are no longer the only option for those looking to keep their lights on in the event of an outage: thanks to a number of incentives, solar batteries are becoming an increasingly attractive and financially-viable solution, particularly for customers of Green Mountain Power (GMP).

Green Mountain Power’s bring your own device program

If you’re a customer of GMP, you’re in luck: the utility offers particularly beneficial incentives for installing a battery through their bring your own device (BYOD) program.

Overview of the program

GMP’s BYOD program, a type of demand response program, pays you an incentive for allowing GMP to access and use the electricity stored in your battery during times of peak demand. Importantly, you do not need a solar panel system to participate in this program: if you have a standalone storage device, GMP re-charges the battery after using the stored electricity.

As an example, let’s say it’s hotter than 100 degrees in Vermont, and everyone’s blasting their air conditioning. Days like this put a lot of stress on the grid because demand for electricity is higher than usual, and GMP may have to turn on “peaker plants” (infrequently used, costly power plants) to meet customer needs. Doing so costs them and, consequently, you money. However, when they have the ability to access and distribute electricity from your charged battery during these times, GMP can use that electricity to curb their need for peaker plant generation, allowing them to save money and allowing you to reap the benefits of the BYOD incentive.

During peak events like this, GMP will send you an alert four hours before drawing electricity from your battery. According to their website, peak events typically occur five to eight times a month and last, on average, three to six hours.

If you’re looking to participate in this program, keep in mind that not all types of batteries are eligible for the incentive. As of June 2020, GMP lists the following as approved options:

  1. Sunverge batteries

  2. SolarEdge StorEdge compatible systems (e.g. LG Chem RESU 10H)

Estimated incentives

GMP offers two payment options for this incentive: an upfront lump-sum payment or monthly bill credits spread out over 10 years.

So, how much can you benefit from this incentive? It depends on a few factors, including:

  1. The size of your battery

  2. The power capacity (kilowatt, kW) you allow GMP to draw from

  3. Whether you pair your battery with a solar panel system

If you’re connecting a standalone battery directly to the grid, you’re eligible for $850 per kW of power available for at least three hours at its full capacity rating. Here’s how this plays out for a Tesla Powerwall 2:

Usable capacity: 13.5 kilowatt-hours (kWh) Storage hour requirement: 3 hours Available power: 13.5 kWh / 3 hours = 4.5 kW Upfront incentive: 4.5 kW x $850 = $3,825

Now, what about if you have a solar panel system? If you connect your solar battery directly to the grid and only use the battery on backup mode (i.e. to power your home during grid outages), you’re eligible for the upfront incentive described above. In this type of scenario, GMP would be able to recharge the battery with electricity from the grid after a peak event.

On the other hand, if you decide to connect your solar battery directly to your solar panel system and use your solar battery on “self-consumption” mode (i.e. charge your battery with solar power during the day, and run your home on stored solar power at night even when the grid is functional), you’re only eligible for an upfront payment of $850, or a fixed monthly payment of $9.65 per month. GMP would not be able to draw from your battery during peak events, but they still incentivize you for installing a solar-plus-storage system because it reduces the overall demand for electricity.

Even though you’d earn less from this GMP incentive by choosing the self-consumption route, you can earn more incentive money overall if you end up taking advantage of the federal tax credit (see below). To claim this credit, you need to charge your battery exclusively with electricity from your solar panel system.

GMP’s Tesla Powerwall pilot program

In addition to the BYOD incentive described above, GMP has another demand response program available to customers in Vermont: the Tesla Powerwall pilot program. With this program, GMP allows you to lease two Tesla Powerwalls for your home. You can participate in this pilot with or without a home solar panel system.

Similar to the BYOD program, GMP will draw electricity from the battery during peak events to help reduce stress on the electricity grid. But when the power goes out, you’ll have a source of backup energy. According to GMP’s website, the two Powerwalls will provide 16 to 24 hours worth of backup power for your whole home.

GMP offers two different leasing payment options: monthly payments of $55 for ten years, or an upfront payment of $5,500. Either way, because this is a lease, GMP owns and maintains the battery throughout the lease agreement.

GMP accepts up to 500 customers in this program each year. If you’d like to learn more about participating in this program, check out this case study (note: pricing for the program was different when we first published it in 2018!).

Federal investment tax credit (ITC)

In addition to the state-specific incentives listed above, your solar battery purchase is also eligible for the federal investment tax credit (ITC). In 2020, the solar tax credit allows you to claim up to 26 percent of the cost of your solar battery as a credit towards your federal taxes.

Importantly, standalone storage is not currently eligible for this tax credit: to claim this incentive for your battery purchase, you need to charge the battery with an on-site renewable energy resource (like rooftop solar). If you have a residential solar panel system and you charge your battery with electricity from the grid, you cannot take advantage of this credit.

However, commercial solar-plus-storage systems have a bit more leeway: if you’re installing a battery on a commercial property, you can claim the tax credit so long as your storage system is charged by your solar panel system more than 75 percent of the time, and the exact value of the credit depends on how frequently you charge your battery with renewable energy. For example, if you charge your battery with solar 80 percent of the time, it is eligible for only 80 percent of the 26 percent ITC – equivalent to a 20.8% percent credit (80% x 26% = 20.8%).

For most homeowners, the ITC can help decrease the cost of a battery by an additional $3,000 to $4,000. You can learn more about the federal investment tax credit here.

Compare battery options on EnergySage

Looking to benefit from these storage incentives (or others)? EnergySage is here to help – sign up on the EnergySage Marketplace to receive up to seven custom solar-plus-storage quotes from installers located in the Green Mountain State. If you’re interested in a particular battery system, simply note it in your account so that they can quote according to your preferences.

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