Pilot program to offer incentives for residents to buy energy storage devices

The Arizona Corporation Commission has approved a pilot program for Arizona Public Service (APS) to offer incentives for residents to purchase energy storage battery systems in their homes next year. 

Under the pilot program, the first of its kind in the state, homeowners could receive up to $2,500 for the purchase and installation of at-home energy storage devices that can capture electricity from the grid or rooftop solar and dispatch it for later use. 

Commissioner Lea Márquez Peterson, who led the effort to advance the program, said she hopes a similar program can be offered by Tucson Electric Power. Eventually, small businesses, retail and commercial industries could be involved if the experiment proves successful.

APS, which worked with storage stakeholders and the utility commission to put together the pilot, must finalize all of the details before it officially kicks off next year. 

To encourage homeowners to participate, the 3-year pilot program includes other benefits including:

• Customers who participate in the pilot will receive an increased incentive per household from $300 per kilowatt to $500 per kilowatt

• Grandfathered net metering rooftop solar customers will remain grandfathered if they install new energy storage devices under the program

Energy storage currently a luxury item 

So far, energy storage battery systems are considered luxury items because of their high cost. A typical energy storage system ranges from $4,000 to $14,000 depending on the size and capacity. 

“Typical batteries for a typical home are between 5 and 10 kilowatts and they’re still fairly pricey,”  said Márquez Peterson. “So the ultimate decision homeowners will have to make is, is this something they’re willing to invest in–to be a first mover.”  

Arizona needs to be on leading edge of energy innovation 

An ultimate goal of the pilot is to advance energy storage technology and bring down the price for mainstream buyers. 

“Obviously we want to see the price of batteries come down and that’s not going to happen until they are more convenient and accessible for everybody to purchase, so I’m very proud to support this pilot program,” Márquez Peterson said. 

Data from the pilot program will help utilities and commissioners better understand the distribution system, how it impacts the entire grid and best practices for Arizona’s unique climate.    

“We don’t want rolling blackouts like in California,” she said. “Battery storage is one solution to that. So we want to see what the ease of storing and calling up the power when needed and then help the advancement of new market entrants to help overall technology costs come down.”

Arizona continues to progress towards cleaner future 

The residential battery program is just one step being taken by utilities and the Corporation Commission to advance clean energy technologies and attract industry to the state.  

This month, the Corporation Commission approved a requirement for utilities to be 100 percent free of carbon emissions by 2050. Nearby states have passed similar requirements including Colorado, Nevada and New Mexico. 

Arizona’s two largest electric utilities, APS and TEP, have also been transforming their operations to achieve their own carbon-free goals.

By moving forward on clean energy, Arizona will be better positioned to compete on the  national and global markets, Márquez Peterson said.