Energy Contracts to Finance Public Batteries
Paying for a battery from its savings, and running it safely for 25 years
October 2026
Paying for a battery from its savings, and running it safely for 25 years
October 2026
This report helps any public or nonprofit owner pay for a battery from the energy costs it cuts, and keep it safe and earning for its whole life. It explains two types of contracts, the energy savings performance contract (ESPC) and the utility energy service contract (UESC). It then shows why operations and maintenance (O&M) decide the outcome.
01
Every public owner has a path
02
The contract is half the job
03
A battery can count as savings
04
Terms run long
05
Utilities can be the contractor
06
Savings pay the bill, not backup
07
Most failures are build and run
08
One missed peak can cost the month
09
Tax credit gates can zero the credit
10
Three examples, paying programs nationwide
11
Busy airport garages pay fastest
12
Write O&M into the contract
13
Build your own program
How to read the sources: each fact carries a short source name and a number. The number links to the full source list at the end, which gives the document name, the web address and the date accessed (2026-10-02 or 2026-10-03). Tags mark facts that are UNCONFIRMED or an ESTIMATE. Gaiergy opinion and Gaiergy readings of a source carry a GAIERGY VIEW tag or sit in a green box. PRESS ONLY marks a number found only in news or trade press, and VENDOR marks a company's own claim. Select any figure to open it at full size.
Cities, counties, states, schools and public authorities sign energy savings performance contracts under state law; New York allows terms up to 35 years (NY Energy Law 9-102, 9-103[1]). Nonprofits sign the same kinds of contracts privately (US EPA, ESPC and ESA page[4]). Housing authorities use HUD's version, up to 20 years (24 CFR 990.185[5]). Some utilities offer the battery as a service on the bill (Xcel MN tariff A43[6]). Federal agencies have their own law: up to 25 years under 42 U.S.C. 8287(a)(1) (42 USC 8287[7]). The US Department of Energy (DOE) says a battery can meet the efficiency test through electricity load management
(FEMP ESPC scope FAQ 2022[8]). Section 2 shows the path for each kind of owner.
Where the examples come from
The worked examples in this report come from New York, New Jersey and California. The rest of the country has viable incentives and capabilities to host batteries too; Section 7 shows them region by region.
So money is rarely the hard part. The hard part comes after the ribbon cutting:
Gaiergy view
Treat a battery like a pump station or a substation. It is public infrastructure with a 20 to 25 year duty. Recommendation: consider buying the O&M, the monitoring and the end-of-life plan in the same contract that buys the battery, for the same term.
Each card names the legal path, how the owner pays, and a real project with its source. Where no battery under an energy contract was found for an owner type, the card says so.
Project: San Diego, nearly 4 MWh of batteries inside an energy and water savings contract financed by a tax-exempt lease of nearly $112 million over 25 years (City of San Diego EWSPC[14]). Santa Barbara adopted a police station Power Purchase and Battery Energy Storage Services Agreement
on 2026-03-10; size UNCONFIRMED (Santa Barbara Council minutes 2026-03-10[13])
Project: Montgomery County, Maryland, Brookville bus depot: 25-year power purchase agreement, first-year energy charge 12.3 cents/kWh, a 2 MW battery on the council slide (Montgomery County Council 2021[15]). Battery MWh UNCONFIRMED
Project: Sonoma State University, 30-year contract signed 2021, a 1.55 MW battery bank
with 4.1 MW of solar, almost $1 million of savings in 2026 (Sonoma State 2026[17]). MW or MWh UNCONFIRMED. SUNY Fredonia: 500 kW of storage under a NYPA-managed power purchase agreement (SUNY Fredonia 2020[18])
Projects: Greenburgh Central School District, New York: $20.5 million ESPC with a 775 kW AC battery VENDOR (RWE 2024, Greenburgh[20]). Newark Board of Education, New Jersey: a $95 million ESIP with Johnson Controls, about 17 MW of solar by power purchase agreement and combined heat and power units; the only battery named is storage for a stadium wind turbine's lighting, size not given (Newark Board of Education ESIP page[21])
Project: Irvine Ranch Water District, California: 6.25 MW / 35.7 MWh at six facilities, owned and operated by Macquarie Capital, about $500,000 a year of energy savings (IRWD 2018[22]). Contract form UNCONFIRMED
Project: Fresno Yosemite International Airport: a 2,000 kW / 3,828 kWh battery under an energy services agreement at a fixed $0.2107/kWh for 20 years (Fresno Council ID 26-566[24])
The contract period shall not exceed 20 years(24 CFR 990.185[5])
Solar Plus Battery Storage(HUD Energy Branch slides 2023[26])
Projects: no housing authority battery under an energy contract was found. Grants lead: Worcester Housing Authority, 125 kW / 261 kWh, $521,640 state grant, awarded 2026-09-18 (Mass. DOER 2026[28]). NYCHA has a battery planned with NYPA at Borinquen Plaza; size UNCONFIRMED (NYCHA 2023[29]). In New Jersey, the Newark Housing Authority used two HUD-approved energy performance contracts, $134 million in all, with cogeneration units that give power during outages; no battery was included VENDOR (Constellation, Newark Housing Authority[30])
renewable energy project, which points to equipment in Real Property Tax Law 487; that law lists
various types of batteries(NY GML 854[31]; NY RPTL 487[32]). Reading the two together to cover a stand-alone battery is GAIERGY VIEW
Projects: the New York City IDA closed 14 battery projects in fiscal 2025, nearly 100 MW
(NYCIDA FY2025[35]). All found are privately owned. Section 15 covers the IDA role
Project: Hackensack Meridian Health, New Jersey: a 30-year energy-as-a-service agreement, $134 million of work, nearly 98% of it solar and battery storage VENDOR (ENFRA, HMH project page[37]). Battery size UNCONFIRMED
Federal agencies sign ESPCs for up to 25 years under 42 U.S.C. 8287(a)(1) and utility contracts under 42 U.S.C. 8256 (42 USC 8287[7]; 42 USC 8256[38]). Example: Marine Corps Recruit Depot Parris Island, a 4.0 MW / 8 MWh battery inside a $91 million project VENDOR (Ameresco 2019, Parris Island[39]). Sections 5 and 6 treat the federal contracts as one variant among many.
Gaiergy view
The owner type sets three things: which law the contract sits under, whether the owner can take the tax credit as cash, and how long the term can run. Recommendation: consider settling those three questions before choosing a contractor.
A system integrator puts battery modules in containers, adds cooling and fire suppression, and connects them to the inverter. A construction contractor installs the system and connects it to the grid (PNNL 2020[40]). The Pacific Northwest National Laboratory (PNNL) groups the hardware into the storage block, the balance of system, the power conversion system, controls and communication, and grid integration (transformer, busbars, breakers and meters) (PNNL 2020[40]).
Store the energy. Cells are the fuel in a thermal runaway, even when the failure starts elsewhere GAIERGY VIEW.
Watches cell voltage, current and temperature, and puts the system in a safe state on a fault. The fire code calls for one where the system's listing calls for it (NYSERDA BESS Guidebook 2024[41]).
A listed device or method to prevent, detect and limit the impact of thermal runaway; it may be part of the battery management system. The fire code calls for it for lithium-ion (NYSERDA BESS Guidebook 2024[41]).
Noncombustible steel box. Keeps out weather and water. Outdoor walk-in units over 4,028 cubic feet count as indoor rooms (NYSERDA BESS Guidebook 2024[41]; FEMP Li-ion BESS spec 2025[42]).
Holds cells inside the warranty temperature window (FEMP Li-ion BESS spec 2025[42]).
Turns battery DC into grid AC and back. Listed to UL 1741, a UL Standards and Engagement (UL) standard, for grid use (NYSERDA BESS Guidebook 2024[41]; FEMP BESS procurement checklist 2023[43]).
Clear faults and isolate the battery, plus a visible disconnect for the utility (FEMP Li-ion BESS spec 2025[42]).
The site controller. Decides when to charge and discharge. This is what turns the battery into savings. FEMP asks for a written sequence of operations and dispatch updates when tariffs or loads change (PNNL 2020[40]; FEMP Li-ion BESS spec 2025[42]).
Lets the owner and the O&M provider watch the battery. FEMP asks for 15-minute data, at least 36 months stored, alarms, a separate internet connection and agency cybersecurity rules (FEMP Li-ion BESS spec 2025[42]).
Detects flammable off-gas. Where exhaust ventilation is used, it is designed to keep gas below 25% of the lower flammable limit and has 2 hours of standby power. For lithium-ion, the code handles off-gas mainly through explosion control, not a stand-alone ventilation rule (NYSERDA BESS Guidebook 2024[41]).
Vent panels or ventilation, because battery off-gas can ignite in a closed box. UL 9540, third edition (2023), added explosion control (NYSERDA BESS Guidebook 2024[41]; ULSE 2023[44]).
In rooms and walk-in units: sprinklers at 0.3 gpm per square foot, or other agents approved by large-scale tests (NYSERDA BESS Guidebook 2024[41]).
10 feet from lot lines, buildings, public ways and stored combustibles outdoors, so a fire does not reach neighbors or exits. This is the New York code; other codes and local zoning can differ (NYSERDA BESS Guidebook 2024[41]).
System safety listing and fire test data. They justify spacing and suppression choices (NYSERDA BESS Guidebook 2024[41]).
A fence with a self-locking gate; the New York model law suggests 7 feet as a default each town can edit (NYSERDA BESS Guidebook 2024[41]).
Hazards, suppression type and a 24-hour emergency contact for firefighters (NYSERDA BESS Guidebook 2024[41]).
Bollards where a vehicle could hit the units, as in a parking lot (NYSERDA BESS Guidebook 2024[41]).
Shutdown, alarm and fire procedures, drills and training of local firefighters (NYSERDA BESS Guidebook 2024[41]; CPUC GO 167-C[45]).
The code calls for 2 hours of standby power for exhaust ventilation and gas detection (NYSERDA BESS Guidebook 2024[41]). Keeping cooling and controls on too is good practice GAIERGY VIEW.
Paper, not hardware, but the fire code lists all three, plus a contracted service agency and a service log (NYSERDA BESS Guidebook 2024[41]).
Code note: the New York code cited above is the 2020 Fire Code of New York State, Section 1206, as reprinted by NYSERDA. NYSERDA says these rules are based on the 2021 International Fire Code (IFC), where they sit in Section 1207 (NYSERDA BESS Guidebook 2024[41]). Whether the 2024 IFC is the same is UNCONFIRMED. New York adopted a newer code in 2025 (Section 10).
A typical small public battery site shows three pieces from the fence: the battery enclosure, a small control and communications cabinet, and the transformer. Figures 7 and 8 show the set in plain form.
A battery that serves one building uses the same parts, smaller. FEMP's template specification describes this case: a behind-the-meter lithium-ion battery in self-contained enclosures on a pad, with cooling, a sequence of operations, commissioning to the National Fire Protection Association standard NFPA 855 or the IFC, and optional backup through a transfer switch and microgrid controller (FEMP Li-ion BESS spec 2025[42]). Typical cabinet size for this class of system is UNCONFIRMED.
It is typically not feasible to place lithium-ion BESS on roofs or in buildings(FEMP BESS procurement checklist 2023[43])
Pays most contracts
Pays when the battery shows up
Variable: guarantee with care
A benefit, not a payment source
Most commercial and public accounts pay a demand charge. It is typically based on the highest average electricity usage occurring within a defined time interval (usually 15 minutes) during a billing period
(NREL/BR-6A20-68963[10]). A battery that discharges during that interval lowers the bill. FEMP's measurement rules treat a battery as a measure that cuts peak demand and time-of-use energy charges
(FEMP M&V Guidelines 5.0[48]). At San Diego International Airport, peak demand charges were about 40% of the airport's monthly electricity costs when it added a 2 MW / 4 MWh battery VENDOR (Cleantech San Diego 2019[49]).
Utilities pay customers to cut load when the grid is tight. A battery can deliver that cut without turning anything off. These rates were on utility and regulator pages on 2026-10-02:
National Grid's Dynamic Load Management (DLM) programs, Term-DLM and Auto-DLM, pay only for load relief on the substation and feeders listed in each request for proposals (National Grid DLM RFP 2027[52])
Open to National Grid electric customers on a commercial electric rate
who pay into the energy efficiency fund (National Grid MA ConnectedSolutions[53])
Two programs, two rate scales
Municipal electric utilities show how much a well-timed battery can earn. Sterling Municipal Light Department in Massachusetts installed a 2 MW / 3.9 MWh battery in 2016 for about $2.7 million. It reports savings of about $400,000 a year (Sterling MLD fact sheet[57]). Sandia attributes the value mainly to cutting the monthly transmission peak and the yearly capacity peak (Sandia SAND2017-1093[58]). Sandia's study of the site makes the timing plain: the battery has to be fully charged and then discharge during the hour of monthly peak load
(Sandia SAND2017-1093[58]). The Massachusetts Municipal Wholesale Electric Company (MMWEC) reports $33.8 million of member savings from peak forecasting and dispatch from 2017 to 2024 (MMWEC energy storage page[59]).
For federal agencies, the Energy Act of 2020 added grid services revenue
to the list of things that count as energy savings and that may fund an ESPC (42 USC 8287[7]; 42 USC 8287c[60]). The statute does not define the term. Whether wholesale capacity and frequency regulation income count is UNCONFIRMED; Gaiergy reads the plain words as covering them GAIERGY VIEW. FEMP notes that savings from demand response and similar grid-interactive measures may be highly variable
when they depend on utility signals, and suggests a reduced starting guarantee or a contractor reserve account until the savings are proven (FEMP GEB best practices 2024[61]).
Resilience is real, but it rarely pays the contract. PNNL: resilience improvement measures do not always result in a reduction in energy or water consumption and therefore do not generate utility cost savings which are the primary driver behind performance contracts
(PNNL-37058[47]). Federal ESPC law allows benefits ancillary
to energy savings (42 USC 8287[7]); Gaiergy reads resilience as one GAIERGY VIEW. No federal rule was found that lets an agency count a dollar value of avoided outages toward the savings guarantee UNCONFIRMED.
Two methods close the gap. Bundling: at the Oklahoma City federal building, pairing grid-interactive measures with fast-payback measures helped offset the long payback periods typical of resilience technologies
(PNNL-37058[47]). Mixing money: FEMP says appropriations can be combined with financing for costs that savings cannot carry (FEMP microgrid fact sheet 2025[62]).
Gaiergy view
Recommendation: size the savings guarantee on what can be measured every month, the demand charge cut and the program payments. Count grid services only after a year of results. Treat backup power as a benefit the community gets, not as a line in the payment plan.
Every program found follows the same six steps, whatever the state (DOE ESPC toolkit App. A[65]; NYSERDA EPC guide 2013[66]; NJ DCA LFN 2009-11[67]; Cal. Gov. Code 4217.10-.19[12]):
administration, finance, legal, procurement, facilities, maintenance(DOE ESPC toolkit App. A[65]).
will not be recoveredif no project results (NYSERDA EPC guide 2013[66]).
Competitively solicit financing(DOE ESPC toolkit App. A[65]). Common forms: lease-purchase, certificates of participation, tax-exempt lease (below).
subject to the agency making sufficient annual appropriations(Fla. Stat. 489.145[70])
do not count against debt limits(NJ DCA LFN 2009-11[67])
local and other public bodies(Virginia contract E194-82899[72])
shall provide for a guarantee of savings to the agencyand an annual energy audit (42 USC 8287[7]).
responsible for maintenance and repair services for any energy related equipment, including computer software systems(42 USC 8287[7]).
Scale: from 1997 to 2020, DOE IDIQ ESPCs leveraged $7.5 billion of investment to save more than $17 billion in guaranteed cost savings (FEMP ESPC fact sheet[78]). Oversight matters: the Government Accountability Office found overstated cost and energy savings on 14 of 20 ESPC projects it reviewed in 2015 (GAO-15-432[79]).
No state has a UESC statute like the federal one GAIERGY VIEW. Non-federal owners reach the same result by three routes (RCW 39.35C[80]; N.J.S.A. 40A:11-5[81]; Xcel MN tariff A43[6]):
A local utility shall be offered the initial opportunity to participate in the development of conservation projects, and storage is named (RCW 39.35C[80])
an affiliateof an energy services firm (Tex. Local Gov't Code ch. 302[82])
the rendering of any service by a public utilityunder tariffs filed with the utility board (N.J.S.A. 40A:11-5[81]); same rule for boards of education (N.J.S.A. 18A:18A-5[84]). It fits a battery only if one is offered by tariff; none was found GAIERGY VIEW
commercial, government and industrial customersin Minnesota and Wisconsin (Xcel Energy 2024[88])
sleevesa developer's power to its cities (Ava Board 2024[90])
will be the exception rather than the rule(NY PSC Case 14-M-0101[94])
utility ownership should not be necessary(NY PSC Case 14-M-0101[94])
manage electricity demandand may accept goods and services from the utility (42 USC 8256[38]). FEMP defines a UESC as a contract for
measurable energy or water reductions or measurable amounts of demand reduction(FEMP UESC FAQ[95]).
not required, negotiable(FEMP GEB best practices 2024[61]).
onsite generation and storage where cost-effective(FEMP UESC Guide 2025[97]).
A public owner can also pay for a battery without carrying it on its own books, or without a savings guarantee. Each path below has a real public example.
similar to a power purchase agreementthat uses ESPC authority (FEMP ESA FAQ[76])
Example: GSA land ports of entry in Texas and New Mexico, awarded a 2020 FEMP grant for solar plus battery under an ESPC energy sales agreement (FEMP AFFECT 2020 list[98]); built status UNCONFIRMED
Examples: Duke Energy Florida, John Hopkins Middle School: announced 2020, a 2.5 MW battery and 1 MW solar canopy at a special needs shelter (Duke Energy 2020[99]); in-service date UNCONFIRMED (Duke Energy 2022[100]); Green Mountain Power's 4 MW Stafford Hill battery on a closed city landfill, with $30,600 a year of land rent to Rutland (US EPA 2016, Rutland[101])
Examples: Fresno Yosemite Airport, 20-year fixed $0.2107/kWh under two energy services agreements (Fresno Council ID 26-566[24]); West Boylston, Massachusetts, a 20-year shared savings contract with no utility capital (MMWEC 2026, West Boylston[103])
Example: State University of New York (SUNY) New Paltz, solar plus battery for the campus emergency shelter; costs beyond $461,000 of NYSERDA and Central Hudson funding were financed by NYPA and will be repaid by the College
(SUNY New Paltz News 2018[104])
California rules let other utilities add storage, after each files for it (CPUC D.23-08-026[107])
The owner carries all O&M unless it buys a service contract
The ESCO industry reported $10.7 billion of revenue in 2024. K-12 schools were $3.22 billion and state and local government $1.80 billion (LBNL ESCO report 2026[109]). On a scale where 1 means never or rarely and 3 means very frequently, ESCOs rated battery storage 1.60 in state and local projects and 1.52 in kindergarten to grade 12 school projects, though LBNL still lists storage among the three most used energy security measures (LBNL ESCO report 2026[109]). 52% of ESCOs in the public market reported delays due to complex scopes such as microgrids (LBNL ESCO report 2026[109]).
This report's examples come from these three states. The rest of the country has workable laws and paying programs too (Section 7 and the state cards below).
a portion of the energy savings or revenues(NY Energy Law 9-102, 9-103[1])
Batteries in New York law
The Energy Law does not name storage. A battery fits Energy Law 9-102(4) only as equipment that will produce energy in connection with
a facility (NY Energy Law 9-102, 9-103[1]). NYPA's subdivision 17 does not name storage either, but other parts of section 1005 do: NYPA may build energy storage projects
, and subdivision 27-a covers facilities that store and discharge power and energy
(NY PAL 1005(17)[16]). Whether subdivision 17's clean energy technology
covers a battery: GAIERGY VIEW yes; no agency or court reading was found, UNCONFIRMED. NYPA has financed a battery for a public customer in practice (SUNY New Paltz) (SUNY New Paltz News 2018[104]).
A note on debt: New York General Municipal Law 109-b installment purchases are not debt, but their unpaid payments count as existing indebtedness when testing the debt limit (NY GML 109-b[111]). An Energy Law contract procured by request for proposals is exempt from 109-b (NY Energy Law 9-102, 9-103[1]).
demand response equipment; storage is not named (NJ P.L.2009 c.4; P.L.2012 c.55[11])
without upfront capital expense OR impact to taxpayers(NJ BPU ESIP memo 2026[112])
identify maintenance requirements necessary to ensure continued energy savings(NJ P.L.2012 c.55[27])
shall not be used to finance maintenance, guarantees, or verification of guarantees(NJ P.L.2012 c.55[27])
load management techniques and equipmentcount as conservation measures (Cal. Gov. Code 4217.10-.19[12])
may request proposalsand award on experience, technology and cost (Cal. Gov. Code 4217.10-.19[12])
Each card shows the statute, the longest term, and whether the law names storage, names peak demand or demand response, or lets market or utility revenue count. A gray chip means the text read does not say it. The governing sections were read on official legislature or code sites, or on Westlaw's public site for Maryland and New York schools. For NYPA, only the relevant subdivisions of section 1005 were read.
Revenue is marked on wherever the law lets any revenue count, including billable revenue from better meters.
Lists Energy storage systems
and demand response programs
; repayment from complete installation and acceptance (Fla. Stat. 489.145[70])
Distributed resources include energy storage, demand response
; utility or Bonneville payments count, and energy savings may be sold to the local utility; energy as a service allowed until June 30, 2033 (RCW 39.35C[80])
load shifting to reduce peak demand
; revenue increases count toward the guarantee (62 Pa.C.S. 3751-3758[64])
Measures include demand response equipment
; plan lists PJM Interconnection (PJM) demand response revenue (NJ P.L.2009 c.4; P.L.2012 c.55[11]). Term runs from completion of the measures (NJ P.L.2012 c.55[27]). Whether a later amendment changed the term UNCONFIRMED
load management techniques and equipment
; may sell electrical generating capacity
(Cal. Gov. Code 4217.10-.19[12])
State law reaches costs of electrical energy and demand
; state term 20 years after construction is completed (NRS 333A[116]); local up to 25 years (NRS 332; NRS 333A[117])
Paid from energy savings or revenues
; capped at useful life; schools 18 years (NY Energy Law 9-102, 9-103[1]; 8 NYCRR 155.20[19])
Payments may rest on revenues gained due to the contractor's services
; measurement and verification (M&V) to FEMP standards (M.G.L. c.25A[63])
Paid from cost savings, lease payments, or specified revenues
; ESCO pays shortfalls in 30 days (HRS 36-41[118])
Savings may include renewable energy credits and carbon credits; valid without a prior appropriation (50 ILCS 515[119])
State units; measure definition and local law UNCONFIRMED (Md. SFP 12-301[120])
Not debt under constitutional or home rule limits, up to a set share of assessed value; a meter guarantee counts billable revenue (C.R.S. 29-12.5[121])
Shortest of useful life, financing term or 25 years; revenue from improved meters counts; M&V per the International Performance Measurement and Verification Protocol (IPMVP) or FEMP (A.R.S. 34-105[122])
Both from final installation (Minn. Stat. 16C.144[123]; Minn. Stat. 471.345[124])
Municipal: lesser of system life or 30 years (ORC 717.02[125]). State: 15 years, 20 for cogeneration (ORC 156.04[126])
Independent engineer reviews savings before signing; billable revenue gains count (Tex. Local Gov't Code ch. 302[82])
From installation and acceptance; measures may capture lost revenue
(N.C.G.S. 143-64.17[127])
Term and package payback both capped at 20 years (C.G.S. 16a-37x[128])
100% performance guarantee bond; annual reconciliation (Va. Code 45.2-1702[129])
Revenue language in most of these laws was written for meters or generation. Whether a capacity or demand response payment from a battery counts toward a guarantee is a contract and auditor question that these texts do not settle GAIERGY VIEW.
solely for the purpose of achieving energy savings and benefits ancillary to that purpose(42 USC 8287[7])
improve energy efficiencyand involve, among others,
energy consuming devices and required support structures(added in 2020) (42 USC 8259[130])
managing electricity load through the use of batteries(FEMP ESPC scope FAQ 2022[8])
Battery energy storageunder peak shaving and load shifting (DOE IDIQ ESPC contract 2023[75])
applied to a Federal building(FEMP ESPC scope FAQ 2022[8])
is permissible only if the ESPC as a whole has a payback period within the twenty-five-year contract period(FEMP ESPC scope FAQ 2022[8])
shall use performance contractingfor at least 50% of the measures found in facility evaluations (42 USC 8253[131])
One regulation lags the statute. The DOE rule at 10 CFR 436.31 still reads applied to an existing Federally owned building or facility
and lacks the 2020 wording (10 CFR 436 Subpart B[135]). The same rule says its permissive terms shall be liberally construed
, and FEMP applies the broader statute (10 CFR 436 Subpart B[135]; FEMP ESPC scope FAQ 2022[8]). Gaiergy reads the statute as controlling where the two differ GAIERGY VIEW.
National Grid ConnectedSolutions pays business batteries on daily dispatch, 30 to 60 summer events (National Grid MA ConnectedSolutions[53])
Energy Storage Solutions: $325 per kW for years 1 to 5, then $175 for years 6 to 10, small and medium business class; the battery discharges on a set schedule each summer (Energy Storage Solutions, April 1, 2026 changes[136])
Efficiency Maine pays $200 per kW a year on five-year contracts for battery output at the summer peak; applications July 1, 2026 to June 30, 2027 (Efficiency Maine PON EM-003-2027[137]; Efficiency Maine ESS summary[138]). Town and school eligibility UNCONFIRMED
ComEd rebate for a storage device paired with on-site solar at a business site over 100 kW (ComEd DG rebate page[139])
Omaha Public Power District pays any commercial customer with stored energy
of 100 kW or more, plus $0.25 per kWh during events (OPPD Business Curtailment[140])
Duke Energy PowerShare Storage is open to government and other nonresidential participants
: a one-time $120 per kW credit, then $3.50 per kW each month (Duke Energy release, PowerShare Storage SC[141])
ERCOT carries about 90% of the state's load (ERCOT, About[142]). Oncor's 2026 load management program pays up to $35 per kW of summer peak reduction; batteries are not named UNCONFIRMED (Oncor 2026 Commercial Load Management manual[143])
Rocky Mountain Power Wattsmart Battery: business batteries over 30 kW get a custom offer letter (Rocky Mountain Power Wattsmart Battery[144]). Government account eligibility UNCONFIRMED
Check eligibility first
a business in good standing(Efficiency Maine PON EM-003-2027[137]); Rocky Mountain Power's page speaks of commercial batteries (Rocky Mountain Power Wattsmart Battery[144]). Recommendation: confirm with the program office before counting a city, school or authority as eligible.
Gaiergy view
No state is a dead end. Where a state has no battery incentive, a utility peak program, a wholesale market or direct pay of the federal credit can still carry part of the cost, and an energy contract can pair the battery with savings measures the law already names (Section 6). Recommendation: consider checking all four before deciding a battery will not work in your state.
An airport that takes federal grants gives a written assurance that its revenues will be expended for the capital or operating costs of
the airport, the local airport system, or other local facilities tied to air transportation (49 USC 47107[23]). The same limit applies to any airport that is the subject of federal assistance (49 USC 47133[154]). The Federal Aviation Administration (FAA) bars payments that exceed the fair and reasonable value
of services provided to the airport (FAA revenue use policy 1999[155]).
Airport revenue can pay for power, savings or resilience used at the airport. Keep the price defensible as fair value; a competitive procurement is the usual proof GAIERGY VIEW.
Airport revenue pays only the airport's share, so a pooled contract needs a written split by facility GAIERGY VIEW. Hawaii's airports used a separate airports contract financed with $167.7 million of certificates of participation (Hawaii DOT 2013[69]).
Revenue from a sponsor's own activity on airport property is airport revenue (FAA revenue use policy 1999[155]). So battery market income stays in the airport system GAIERGY VIEW.
The FAA reads the self-sustaining assurance to mean the airport receive fair market value for the provision of nonaeronautical facilities and services
(FAA revenue use policy 1999[155]; 49 USC 47107[23]). At California Redwood Coast-Humboldt County Airport, the FAA had to approve the ground lease and release 11.1 acres for nonaeronautical use. It approved on March 2, 2021. The rent was paid in kind: a 300 kW net-metered solar array was estimated, when the lease was negotiated, to save the county more than $44,000 a year, which was shown to be equivalent to the fair market value of the lease
(CEC-500-2026-006[156]).
renewable energy generation and storage infrastructureto the airport power supply and microgrid category of airport development (49 USC 47102[157])
usable unit of work. To count as part of a microgrid, a stand-alone battery links to an existing generator or is bought in the same project that makes a working microgrid (FAA R-PGL 25-02[158])
renewable energy generation and storage infrastructureand a
microgrid(49 USC 47102[157])
Large airport ESPCs have not included batteries in the cases found. Hawaii's airports ESPC, about $206 million, promised more than $606 million in guaranteed savings over 20 years from lighting, solar and cooling, with no battery listed (Hawaii DOT 2018[182]).
any energy storage technology(26 USC 48E[147]), with a nameplate capacity of at least 5 kWh (26 CFR 1.48E-2[183]). Lithium-ion batteries are listed (26 CFR 1.48E-2[183]).
any organization exempt from the tax imposed by subtitle A(26 USC 6417[36])
The owner rule is strict: the electing entity has to own the property, and credits owned by a third party do not qualify (26 CFR 1.6417-2[146]). Pre-filing registration is a condition of the election (26 CFR 1.6417-5[189]). An excessive payment is repaid with a 20% penalty unless there is reasonable cause (26 USC 6417[36]). Whether a city qualifies when an ESCO or lender holds title on the placed-in-service date is UNCONFIRMED.
For a direct-pay owner, the share of credit paid without domestic content falls to 0% for construction starting after 2025 (26 USC 45Y[148]; IRS Notice 2024-9[190]). Two ways out:
Miss it: zero credit. How the 1 MW AC test applies to a battery: UNCONFIRMED
Storage that begins construction after 2025 is not eligible if it includes material assistance from a prohibited foreign entity (26 USC 48E[147]). The test is a cost ratio. The share of cost free of prohibited foreign entities has to reach:
Miss it: zero credit. IRS interim safe harbors are in Notice 2026-15 (IRS Notice 2026-15[192]). Whether the owner and recapture rules reach a government owner: UNCONFIRMED
The credit is cut by the lesser of 15 percent or a fraction
tied to tax-exempt bond proceeds used for the project (26 USC 45[193]; 26 USC 48E[147]).
Miss it: up to 15% cut. Whether a municipal tax-exempt lease purchase used for an ESPC triggers the cut: UNCONFIRMED; bond counsel decides per deal
What happened in San Diego
San Diego's energy and water savings contract, financed by a tax-exempt lease of nearly $112 million and approved in early 2026, includes nearly 4 MWh of batteries. The city says the financing considered the elimination of anticipated Investment Tax Credits (ITC) for battery energy storage systems based on new federal program deadlines established in summer 2025, which also informed the removal of several sites
(City of San Diego EWSPC[14]). The expected loss of the credit helped shape the scope.
What this section shows: every source cited above, in order of first use, with its web address and the date accessed.