RENEW Energy Partners specializes in funding energy saving retrofits for your commercial, industrial, and institutional buildings. There are many different technologies we install to make your buildings more efficient and reduce your energy bill. With the rising costs of energy, a great way to do this is by installing a battery energy storage system (BESS).

What is battery energy storage?

A battery energy storage system (BESS) is a system composed of interconnected batteries that store electricity generated from renewable energy. The system is typically used in commercial buildings and industrial facilities to store energy when production is high, and to dispatch energy when there are spikes in demand on the grid.

Battery energy storage systems typically consist of one or more battery units, power electronics for managing the charging and discharging processes, and an algorithm-based control system to monitor and optimize the system’s performance. The batteries used vary in type, including lead-acid, lithium-ion batteries, or other advanced technologies.

These systems are installed at various scales, ranging from small residential or commercial systems to large-scale utility systems. The specific configuration and capabilities of a battery energy storage system depend on the intended application and the requirements of the user or facility.

Backed by best-in-class manufacturing partners and intelligent, predictive software, Renew Energy Partners has partnered with ICETEC Energy Services, Kinsley Energy Systems and Stark Tech to offer turnkey solutions for funding and implementing BESS. To learn more how this solution impacts your building’s energy performance, download RENEW’s product sheet.

What are the capabilities of a battery energy storage system?

Battery energy storage offers several benefits to building owners in managing their energy consumption and reducing costs. Here are some ways battery energy storage helps building owners:

Demand Charge Management

Buildings often have peak electricity demand during specific periods, resulting in high demand charges from utility companies. Battery energy storage helps building owners and industrial manufacturers reduce peak demand by discharging stored energy during these peak periods, lowering demand charges.

Load Shifting and Time-of-Use Optimization

Battery storage enables building owners to shift energy consumption from high-cost, peak-demand periods to low-cost, off-peak periods.

Renewable Energy Integration

Battery energy storage allows for better integration of renewable energy sources, such as solar and wind, by storing excess energy generated during periods of high production and using it when renewable generation is low or unavailable. Releasing this stored energy during peak demand periods reduces the need to rely on fossil fuel-based power plants. By facilitating the integration of renewables, BESS helps to reduce greenhouse gas emissions associated with traditional fossil fuel power generation.

Demand Response Participation

Building owners can enroll their battery energy storage systems in demand response programs. These programs incentivize energy consumers to reduce their electricity consumption or shift loads during periods of high demand on the grid.

Power Quality and Voltage Support

Battery storage systems absorb power to regulate voltage and mitigate voltage fluctuations, ensuring that sensitive equipment and processes operate smoothly and reducing the costly risk of equipment damage.

Energy Arbitrage

Battery storage systems take advantage of price fluctuations in electricity rates between different times of the day or between seasons. Electricity can be purchased when prices are low and stored in batteries for use when prices are higher.

Grid Services and Revenue Generation

In some regions, battery energy storage systems participate in grid services such as frequency regulation and grid balancing. Building owners and industrial manufacturers earn additional revenue by providing these services to the grid operator, thereby monetizing their battery assets, and contributing to grid stability. Stabilizing the grid with BESS helps reduce reliance on fossil fuel-based backup power plants, which would otherwise be needed to compensate for the variability of different energy sources.

Advantages and financial feasibility of battery energy storage vary according to factors such as local energy market conditions, utility rates, regulatory frameworks and the building’s energy profile.

Conducting a detailed analysis and feasibility study is crucial to determine the potential benefits and return on investment for a specific building.

How do battery energy storage systems create savings?

Energy savings are realized using battery energy storage systems, which consider factors including local electricity pricing, building energy profile, system capacity and capabilities, and optimization strategies.

Battery energy storage systems are also used to help manage and optimize electricity usage, specifically demand, allowing building owners to achieve a lower ICAP tag.

Peak Shaving 

The ICAP, or installed capacity tag is a charge paid by the building owner that is calculated from the building’s demand on the peak demand day of the grid. This charge is important because it applies to the entire following calendar year.

Potential ICAP tag days usually align with the highest heat index of the year, and when one of these days is predicted, a savvy building operator will reduce their demand to the bare minimum. This is where a battery energy storage system makes a big difference. By discharging stored energy during these peak periods, the building relies less on grid power, pushing demand as low as possible and reducing ICAP costs.

Furthermore, by discharging stored energy during peak hours, BESS helps to avoid the need for additional fossil fuel power plants to meet the peak demand. BESS can also balance the load on the grid by absorbing excess power during low-demand periods and supplying it during high-demand periods, optimizing the overall grid efficiency and reducing the need for carbon-intensive power generation.

Load Shifting 

Battery storage enables load shifting by charging during periods of low demand, when electricity is cheapest, and discharging stored energy during periods of high demand, when electricity is the most expensive.

This is a very effective tactic for reducing energy spend on larger buildings, where time-of-use rates are often in effect.

Demand Response Participation

In areas with demand response programs, a BESS offers a major weapon in the arsenal of energy-aware building operators. Without a backup system, a building operator only cuts demand, which results in lower production or uncomfortable tenants. With a BESS, demand response dispatches are met with minimum disruption to the building’s operations while earning financial rewards for lower demand.

Backup Power 

Perhaps most significantly, battery energy storage systems provide backup power in case of emergency or grid malfunction. By relying on the stored energy, the building avoids enormous costs associated with lost productivity and continue its operations without relying solely on grid power.

What incentives exist for funding battery energy storage systems?

In the US, several incentive programs exist at the federal, state, and utility levels to encourage the adoption of battery energy storage systems.

Federal Investment Tax Credit (ITC)

The federal government offers a 30% investment tax credit for eligible energy storage systems with a minimum capacity of five kWh. This tax credit applies to commercial and residential BESS projects that are co-located with solar or standalone.

Microgrid controllers and interconnection property were also explicitly stated as being ITC eligible. The ITC at 30% has recently been extended through 2032. In 2033, ITC steps down to 26%, and 22% in 2034.

Domestic Content 10% Bonus Guidance Released (IRS Notice 2023-38): The Inflation Reduction Act of 2022 (IRA) created a 10% tax credit adder to encourage the use of “domestic content” in renewable projects that qualify for the ITC.

To meet the domestic content bonus criteria, taxpayers must construct a project with 100% U.S. content steel and iron and incorporate the appropriate “adjusted percentage” of domestically manufactured products. The adjusted percentages of domestic content for manufactured products are as follows:

• 40% for projects that begin construction prior to Jan. 1, 2025;
• 45% for projects that begin construction after Dec. 31, 2024, but before Jan. 1, 2026;
• 50% for projects that begin construction after Dec. 31, 2025, but before Jan. 1, 2027; and
• 55% for projects that begin construction after Dec. 31, 2026.

State-Specific Incentive Programs

Many states offer their own incentive programs to promote energy storage. These programs vary by state and include grants, rebates, loans, tax credits, and performance-based incentives. Examples include the California Self-Generation Incentive Program (SGIP) and the New York State Energy Research and Development Authority (NYSERDA) incentives.

For Massachusetts residents who have purchased their own solar systems, there’s an opportunity to earn monthly incentives through the Solar Massachusetts Renewable Target (SMART) program. This initiative is set to drive over 3,200 megawatts of solar energy projects statewide.

Utility-Specific Programs

Some utilities offer incentive programs to encourage energy storage adoption. These programs include financial incentives, tariff structures, and rate designs for installation of energy storage systems. Examples include the Con Edison Non-Wires Alternative program and the Southern California Edison (SCE) Preferred Resources Pilot.

Check with local authorities and energy agencies for the most up-to-date information on incentive programs in specific locations as they may vary. To learn more about potential ITC on energy storage projects based on location, we have found the Ever.green Tax Credit Marketplace map to be very helpful.

Conclusion

Battery energy storage is becoming increasingly important as the demand for clean energy, grid flexibility, and energy management grows. It plays a vital role in the transition to more sustainable and efficient energy systems by improving the reliability, stability, and efficiency of electrical grids, reducing peak demand, and enabling the integration of renewable energy sources.

Renew Energy Partners is leading the way in energy storage technology, leveraging best-in-class manufacturing partners and innovative software. Our turnkey Battery Energy Storage System (BESS) funding solution allows customers to benefit from greater power stabilization and security.

In this current climate of cost control and resource allocation, the RENEW Master Service Agreement is the perfect solution to help businesses meet sustainability goals and keep facilities in top condition. Reach out to RENEW and talk to us about financing your energy saving retrofits today.

RENEW Energy Partners specializes in funding energy saving retrofits for your commercial, industrial, and institutional buildings. There are many different technologies we can install to make your buildings more efficient and reduce your energy bill. The first place to start is calculating your organization’s Scope 1, 2, and 3 emissions.

Understanding Scope 1, 2, and 3 emissions

To reduce Scope 1, 2, and 3 emissions, the best place to start is to measure and understand your carbon footprint. As we like to say, you cannot reduce what you do not know.

Greenhouse gases (GHG) are divided into three categories for analysis – Scope 1, 2, and 3 emissions. Finding the origin of these emissions is key to reducing them successfully. By understanding their significance, potential analyses can be conducted to reduce them.

Scope 1

Organizations can measure and report their Scope 1 GHG emissions, which come from sources they own or control. Scope 1 carbon emissions include emissions from fossil fuels combustion in company-owned boilers, emissions from company-owned vehicles, and emissions from on-site waste disposal.

To reduce Scope 1 emissions, Renew Energy Partners funds and implements energy saving retrofits. Examples include replacing an outdated HVAC system with a more energy-efficient one or installing motion-sensor lighting. These measures will help reduce emissions while cutting energy costs.

Scope 2

Organizations need to account for Scope 2 emissions to calculate their overall carbon footprint. These are indirect GHG emissions from purchased electricity, heating, and cooling used by that organization. These emissions occur at the source of energy production rather than at the point of use.

To successfully reduce emissions, it is necessary to be aware of the policies and practices of energy suppliers. Tackling Scope 2 emissions is possible. Businesses can encourage their suppliers to decarbonize quickly or change to suppliers that are more eco-friendly. Alternatively, businesses can obtain energy from renewable energy resources.

Companies that wish to reduce their emissions can work with Renew Energy Partners. We provide funding to lower on-site energy consumption and/or assistance in installing renewable energy generation systems, geothermal systems, and co-generation solutions.

Scope 3

Scope 3 emissions refer to indirect emissions associated with the organization’s value chain including supply chain, product use, and disposal. This encompasses both upstream and downstream activities such as production and transportation of raw materials. Understanding Scope 3 emissions can help organizations identify potential sources of GHG emission reductions.

These emissions are often the most significant source of emissions for many organizations, especially those with complex supply chains.

Organizations must take responsibility for their value chain activities, from purchasing to disposal, to reduce their Scope 3 emissions. Working with value chain stakeholders to reduce Scope 1 and 2 emissions can have a major impact on lowering Scope 3 emissions.

Renew Energy Partners is now working with Manufacture 2030 to provide businesses a reliable platform for monitoring, controlling and lowering their value chain emissions. Our combination of services delivers simple solutions to empower your suppliers and help you hit your Scope 3 carbon reduction targets.

Lowering Scope 1, 2, and 3 emissions

Understanding the sources of your company’s carbon emissions and measuring your carbon footprint is a great place to start to lower scope 1, 2, and 3 emissions efficiently.

Where possible, it’s best to look for ways to avoid carbon-intensive activities at the source. Also, make sure to invest in efficient boilers, furnaces, and processing equipment for cutting down on emissions.

Improving energy efficiency by implementing measures such as upgrading HVAC systems and lighting, optimizing building management systems and operations, and implementing energy-efficient practices to reduce energy consumption.

As an alternative, replacing carbon-intensive energy sources with cleaner, low-carbon alternatives such as renewable energy sources, biomass fuels, geothermal, or solar.

Additionally, consider utilizing alternative-powered vehicles for your business fleet or distribution and delivery network—electric vehicles have a significantly smaller environmental footprint than gas and diesel counterparts. Switching to electric vehicles can also help reduce emissions, particularly for businesses that rely on transportation for their operations.

Supply chain sustainability can also help reduce emissions by optimizing transportation and logistics, reducing waste, and encouraging suppliers to adopt more sustainable practices.

Finally, adopting sustainable building practices is one of the best ways to significantly reduce emissions by improving energy efficiency, using sustainable materials, and reducing waste in construction and demolition.

Combining these operational updates with on-site renewable energy such as solar, wind, and hydropower can immediately cut Scope 1, 2, and 3 emissions generated by your company. By implementing these strategies, businesses can lower their GHG emissions efficiently and contribute to the global effort to combat climate change.

How does cutting Scope 1, 2 and 3 emissions fit into a business plan?

Businesses have started re-aligning their strategies to combat climate change and reduce carbon emissions, including those in the oil & gas industry, auto manufacturers, pharmaceuticals, consumer brands and more. As an organization, Scope 1 and 2 emissions-reduction strategies can be incorporated directly into a business plan.

Creating a business plan that incorporates efficiency in processes, manufacturing, facilities management, and vehicle fleets leads to financial savings, improved competitiveness, and healthier bottom-lines. This reduces your financial liability for carbon taxes now or in the future, boosts sustainability for the long-term and helps present your brand image more positively in the global arena.

No matter how you decide to increase your energy efficiency and meet Scope 1, 2 and 3 emissions reduction goals, these kinds of projects require funding. In order to fund an energy efficiency project for your building(s), RENEW Energy Partners offers a Master Service Agreement (MSA). The Master Service Agreement:

• May be treated as an off-balance sheet transaction. In that case, you do not own the asset or carry it on your balance sheet (consult your tax advisor).
• RENEW provides preventive and corrective maintenance in the service agreement.
• Your payment to RENEW will be based on the energy savings confirmed once the system is operational. 

The RENEW Master Service Agreement allows businesses to focus on what they do best, while ensuring that their facilities are performing at their peak with brand new, and high-efficiency equipment. In this current climate of cost control and resource allocation, the energy service agreement is the perfect solution to help businesses meet sustainability goals and keep facilities in top condition. Reach out to RENEW and talk to us about financing your energy saving retrofits today.