Author: Vanessa Liew
The past few decades have seen an explosive scaling of PV technologies. Utility solar costs have fallen by ~85% over the last 15 years, and solar totals 4% of the US energy mix, from 0.2% just 10 years before. To maximize the potential of solar energy, storage is crucial. Massachusetts’ programs like ConnectedSolutions and Clean Peak Energy Standard (CPS) make battery energy storage systems (BESS) an increasingly lucrative investment for commercial real estate – offering new revenue streams and protection against high utility rates during periods of high demand.
ConnectedSolutions: Day-Ahead Capacity Incentive
ConnectedSolutions is Massachusetts’ flagship demand response program. Under the program, commercial customers with behind-the-meter battery systems are compensated for discharging stored energy to the grid during peak-demand periods, typically hot summer afternoons and evenings.
Program Mechanics
- Utilities provide a day-ahead notification of upcoming peak events.
- Participants earn incentive payments per average kilowatt (kW) of capacity made available.
- Dispatches are limited to 1-8 events under the “target dispatch” program, or 30-60 events during the summer under the “daily dispatch” program – C&I customers can elect into either version.
- For new systems, incentive payouts are capped at 1.5x of the site’s annual peak load.
Value Proposition
- Creates a predictable, investment-grade revenue stream, largely independent of variable onsite load (other than the maximum incentive cap).
- Accelerates storage asset payback.
- Can shield properties from peak demand charges.
- Monetizes low-solar periods with strategic battery dispatch.
Clean Peak Energy Standard: Incentives for Strategic Dispatch
Massachusetts introduced the Clean Peak Energy Standard to incentivize clean energy (production or storage) dispatch during the highest-demand hours throughout the year. The program allows commercial customers with behind-the-meter and front-of-the-meter systems to participate, provided they meet eligibility requirements.
Program Mechanics
- Each megawatt-hour (MWh) of clean energy dispatched during designated peak times earns a tradable credit.
- Credits are priced by the market but subject to a cap, and can be sold to utilities or third parties who can use these credits to meet their compliance obligations.
- Batteries paired with solar can charge during low-cost, off-peak hours and discharge during designated peak hours.
- Credit values can be adjusted by a multiplier ranging from 0.3x to 25x, depending on factors like seasonality, peak demand alignment, and program co-enrollment.
Value Proposition
- Generates revenue on top of ConnectedSolutions payments.
- Offsets expensive peak-time electricity consumption and reduces demand charges.
- Provides upside exposure through the sale of tradable Clean Peak credits.
Why Massachusetts Commercial Real Estate Owners Are Deploying in Battery Energy Storage Systems
Tax and Depreciation Benefits
- The federal Investment Tax Credit (ITC) applies to BESS — and while the ITC landscape is evolving, developers like Plankton can often secure eligibility through safe harbor provisions or timely project commencement.
- Accelerated depreciation (e.g. MACRS, bonus depreciation) further leads to tax advantaged returns.
New Income Streams
- ConnectedSolutions capacity payments.
- Clean Peak credits based on kWh storage discharge.
- Reduced demand charges and stabilized utility expenses for asset owners.
Additional Portfolio Impact
- Boosts net operating income and asset valuation.
- Aligns with tenant environmental reporting and corporate commitments without added tenant burden.
Massachusetts battery programs offer commercial property owners a powerful opportunity to capture new revenue and enhance asset performance. ConnectedSolutions delivers summer peak incentives, while the Clean Peak Energy Standard rewards strategic clean energy dispatch year-round through a market-based system. Together, they enable NOI growth, cost stability, and greater system resilience.
Plankton Energy provides tailored modeling to identify the optimal solar-plus-storage configuration for your property. Contact us today to unlock these incentives and maximize your property’s long-term value.