Optional rate class opportunity: Massachusetts has created a rate class that could enable many businesses to save 10-15% on energy bills by using batteries to reduce their use of the grid during peak hours of demand every month.
Growing stack of battery value: This rate class comes on top of opportunities to generate tens or even hundreds of thousands of dollars of revenues from participating in existing incentive programs administered by utilities and the state.
Why work with Scale: Navigating these types of programs and optimizing battery operations to maximize their value requires specialized expertise – and Scale has an unparalleled track record of helping businesses across the northeast do just that.
The past year has seen growing momentum for on-site battery storage across the northeast. In Connecticut, New York, and New Jersey, utilities and regulators have been racing to incentivize battery deployments to stabilize the grid and manage electricity prices amid a looming supply crunch – and unsurprisingly, Scale has found lots of businesses interested in taking advantage of these incentives to get ahead of rising utility rates and grid reliability issues.
Massachusetts is very much part of the trend, with a unique triple stack of value streams that encompasses utility rates and programs as well as state incentives – and that can turn into a full-blown quadruple stack for businesses that opt for a solar-plus-storage microgrid. Based on our analysis, it all adds up to an irresistible value proposition for many businesses, and Scale’s service agreement model turns it into straightforward, day-one energy savings, with none of the up-front costs or complexity.
Intrigued? Let’s break it down.
Monthly Coincident Peak Savings
One big opportunity for bill savings comes from a recently-introduced option for a monthly coincident peak rate class offered by National Grid and Eversource. Typically, a business’s coincident peak charges are based on their energy use during the highest hour of grid demand of the entire year – typically a hot summer day – and that “coincident” energy use is translated into a fixed charge that the business has to pay every month for the following year.
The new optional rates go further by incentivizing businesses to minimize their contribution to maximum grid demand every month, adding up to opportunities for much greater savings – if businesses have the flexibility to tap into on-site batteries during those monthly hours.
How it works: Businesses will pay a monthly coincident peak charge based on their energy use during the previous month’s highest demand hour on the grid. To reduce this charge, businesses can use batteries to reduce their use of the grid during that peak hour every month – if they can anticipate when that hour is, since the utility doesn’t provide advance notification.
What it’s worth: We project that businesses able to reduce their demand during all 12 monthly coincident peaks over the year could save 10-15% on their electricity bills.
ConnectedSolutions Revenues
Another key revenue stream for batteries in Massachusetts is the ConnectedSolutions program, which is offered and administered by utilities under the MassSave initiative. Under ConnectedSolutions, a typical business-sized battery system can generate annual revenues worth tens of thousands of dollars in exchange for supporting the grid during hours of peak summertime demand.
A similar program is also available in Connecticut, and Scale is deeply familiar with the considerable value it can create – in fact, we’ve worked with over a dozen businesses to secure these incentives, accounting for over half of the total statewide participation!
How it works: From June through the end of September, batteries must dispatch to the grid when called upon by their utility. These “energy-sharing events” occur between 3 PM and 8 PM for up to 3 hours at a time, and individual batteries will not be called on more than 60 times per year.
How much value/What it’s worth: Participating customers are eligible for annual payments of $200 per kW of battery capacity, and this rate is locked in for the first five summers after enrollment. Again, with most businesses installing batteries sized in the hundreds of kilowatts or more, this translates into tens or even hundreds of thousands of dollars in annual value.
Clean Peak Energy Certificates
In 2020, Massachusetts lawmakers created an innovative new incentive program called the Clean Peak Energy Standard (CPS), which aims to replace the use of the fossil fueled “peaker” plants typically used to meet periods of highest grid demand with clean resources.
This is accomplished with a mechanism based on the very successful Renewable Portfolio Standard (RPS) model, under which utilities are required to purchase an escalating percentage of their electricity demand from renewable sources. Under the CPS, they must purchase an escalating percentage of their peak demand from “clean” sources.
How it works: Utilities in Massachusetts must purchase Clean Peak Energy Certificates (CPECs) generated by Clean Peak Resources, which include batteries charged primarily by solar as well as demand response – i.e. the reduction of a facility’s demand during peak hours, which can be facilitated by a battery. The percentage of peak demand that must be met with CPECs is currently at 7.5%, and rises every year to reach over 50% by 2050.
What it’s worth: As with the market for Renewable Energy Credits (RECs) used to meet RPS requirements, there is no fixed price for CPECs. However, recent auctions have shown certificates selling at close to the current ceiling price of $45 per MWh, and in 2026 that ceiling rises to $65 per MWh.
An Extra SMART Layer for Solar
Battery storage and solar power have always been a winning combination, and the Solar Massachusetts Renewable Target aka SMART incentive program makes this duo even more dynamic. While the main goal of SMART is to deploy 3.2 GW of solar statewide, the program’s recently-launched “3.0” third round includes new incentives to pair storage with solar installations – and requires it for larger installations.
How it works: Solar projects applying for the program receive fixed rates for their solar generation, which decline for each round of applications. For projects paired with batteries, this amount is increased by a storage “adder.” Notably, all solar installations of 1 MW or greater are also required to be paired with storage in order to facilitate the integration of these large variable loads into the grid.
What it’s worth: Base-level solar incentives are set according to installation size, and program year 2026 rates range from $0.2807 per kWh for 25-250 kW systems to $0.1790 per kWh for 1-5 MW systems. If paired with a battery, this rate is boosted by a storage adder that is calculated based on a ratio of the battery and solar capacity installed.
Helping Massachusetts Businesses Save on Energy
The ability to stack up all of these lucrative value streams – monthly coincident peak savings, ConnectedSolutions revenues, and CPS and SMART incentives – makes Massachusetts one of the best states for businesses to add a solar-plus-storage microgrid to their facility. And that doesn’t even take into account the baseline utility bill savings that solar and storage can provide, or the automated, near-instantaneous backup power that batteries can provide during grid outages.
However, as you might guess from reading this far, capturing all this value isn’t exactly simple. Predicting the monthly coincident peaks requires specialized expertise; managing ConnectedSolutions dispatch requires seamless utility integration; and navigating CPS auctions and SMART applications requires regulatory legwork… And that doesn’t even take into account the inherent complexity of designing, building, and operating a battery system, let alone a battery system that’s integrated with solar or other distributed energy assets.
Scale’s business is all about making it easy for companies to take advantage of the tremendous value of distributed energy technologies like batteries and microgrids. Our fully-financed microgrid service agreement (MSA) model makes Scale responsible for managing all the complexities of designing and operating your system, monetizing these incentives, and maximizing the value they create – and our customers just get (much) lower energy costs and more reliable power supply from day one, all for $0 up-front.
Ready to see how much value a battery could stack up for your facility? We can generate a quick, free estimate using our proprietary project analysis platform – reach out to get started today.
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