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Connecticut rebuilt its commercial battery incentive this year. Upfront payments are gone; what replaced them pays more, over 10 years, for a battery that actually shows up when the grid calls.
Small and medium commercial customers — annual peak demand below 500 kW — earn $325 per kW per year for years 1 through 5 and $175 per kW for years 6 through 10. Large C&I earns $275 then $175 per kW. Priority customers also receive a $10 per kWh enrollment incentive. These rates took effect April 1, 2026 and replaced the old upfront incentive entirely.
PURA's Year Five decision in Docket No. 25-08-05, released December 17, 2025, retired two things at once: the declining-block upfront incentive, and the mandatory Passive Dispatch track that came with it. In their place is a small enrollment incentive and a much larger stream of performance payments over 10 years, tied entirely to Active Dispatch. The program calls the new design Construct 5. It governs every enrollment application submitted on or after April 1, 2026; systems already enrolled stay on legacy terms.
| Before (January 1, 2022 - March 31, 2026) | Now (from April 1, 2026) | |
|---|---|---|
| How you are paid | Declining-block upfront incentive, paid once at commissioning | Small enrollment incentive plus 10 years of performance payments |
| Commercial upfront incentive | Up to $182.00/kWh (small), $159.25/kWh (medium), $91.00/kWh (large) | None for standard C&I; $10/kWh enrollment incentive for priority customers |
| Performance rate | $200/kW summer plus $25/kW winter, years 1-5, same for every class | $325/kW (small and medium) or $275/kW (large), years 1-5 |
| Dispatch | Mandatory Passive Dispatch — about 60 pre-scheduled summer discharges, 3 hours, uniform dispatch, 5 PM to 8 PM | Active Dispatch only — the utility calls events, and the battery is measured on what it delivers |
| Winter events | Up to 5 per season | Up to 10 per season |
| Application fee | None | $350, non-refundable, C&I applicants only |
The legacy design ran for more than four years and generated a large body of published material — utility program pages, contractor summaries, incentive calculators, and government fact sheets. A good deal of it still describes an upfront incentive covering a share of battery cost and a passive dispatch obligation, which is the closed structure. Before you build a business case on a number, check that the source names Docket No. 25-08-05 or the April 1, 2026 effective date. If it names neither, it predates the change.
Two rate bands, split on annual peak demand. Payments are calculated on the average alternating-current contribution measured across the season's events — what the battery actually delivered, read from inverter data, not what its nameplate says.
Annual peak demand under 500 kW
Annual peak demand of 500 kW or more
Modeled on full participation at the published rates. Real payments track measured seasonal performance, so an under-responsive or frequently-opted-out system earns less. Not a quote.
Standard commercial customers receive no enrollment incentive under the new structure. Priority customers receive $10 per kWh of rated capacity. Four routes qualify:
Commercial and industrial customers with annual peak demand below 200 kW.
Facilities meeting the statutory definition at Conn. Gen. Stat. section 16-243y(a)(2).
Customers swapping an existing fossil-fuel generator for a comparably sized battery, with an approved decommissioning plan.
Sites on the top 10 percent of circuits by storm outage count, or by storm outage duration, since July 1, 2012. A circuit map is published by the programme.
No. A standalone commercial battery qualifies. The Program Manual is explicit that batteries may be both standalone and coupled with other energy resources such as solar, and the program's commercial materials list solar, solar plus battery, and a standalone battery system as eligible configurations. Both alternating-current and direct-current coupled designs are accepted.
This matters more than it sounds. A Connecticut business with a demand-charge problem and a constrained roof can go straight to storage and still collect the full performance incentive. Pairing with solar changes the economics — you charge from your own generation instead of the grid — but it is not a condition of entry.
Active Dispatch. The utility calls events; the battery discharges; the payment reflects what it delivered. That is the whole bargain, and it is a meaningfully different commitment from the old passive schedule, which discharged the battery on a fixed summer calendar whether or not the grid needed it.
June 1 - September 30
November 1 - March 31
Opting out of an individual event is allowed and carries no penalty. It is not free, though: the battery is recorded as delivering zero kW for that event, and because the incentive is calculated on the seasonal average, every skipped event pulls the payment down. Sites with genuine operational constraints during summer afternoons should model that before committing.
They are separate streams and they add. The program pays for grid service during called events; demand charge reduction is money you keep on your own bill by shaving your monthly peak. The calculator below combines both. Enter the demand rate from your own tariff sheet rather than an assumed figure — Connecticut commercial demand charges vary by utility and rate class, and the difference moves the answer materially.
Enter the numbers from your own utility bill to model your facility.
From your bill (highest 15-minute kW).
From your utility tariff or bill. Example shown — enter your own.
Capped at 40% — real-world peak shaving rarely exceeds this without oversizing the battery.
Peak reduction
50 kW
25% of 200 kW peak
Annual demand-charge savings
$9,000
50 kW × $15/kW-mo × 12
Annual DR revenue (yrs 1-5)
$16,250
50 kW dispatch × $325/kW-yr — CT ESS Active Dispatch performance incentive
Net cost after ITC (30%)
$45,500
$65,000 − $19,500 ITC
Simple payback
1.8 yrs
demand savings + DR revenue
10-year net value
$169,500
cumulative savings + DR − net cost
Estimates only, built entirely from the values you enter — confirm against your utility tariff and a tax professional. Demand-charge savings use your billed peak demand, your demand rate, and your expected peak-shaving fraction. Demand-response revenue uses published Energy Storage Solutions program incentive rates (CT ESS Active Dispatch performance incentive) and requires enrollment plus dispatch participation; actual payments depend on your dispatched performance and are capped here at the capacity your entered battery energy can sustain. Massachusetts and Rhode Island publish different ConnectedSolutions rates for business batteries, and this calculator keeps them separate. The federal ITC (30% base plus site-specific adders) applies to the battery cost; tax-exempt entities use elective (Direct) Pay.
Energy storage technology is its own qualifying category under Section 48E(c)(2). There is no requirement that a commercial battery be paired with solar or charged from a renewable source to claim the credit.
Energy storage technology is not subject to the December 31, 2027 placed-in-service deadline or the July 4, 2026 begin-construction trigger — both apply to applicable wind and solar facilities only, and Section 48E(e)(4)(C) expressly excepts energy storage technology (IRS Notice 2025-42, section 2.02). A standalone commercial battery keeps the 30% Section 48E credit under the standard clean-electricity phase-out, which starts at the later of 2032 or when U.S. greenhouse gas emissions from electricity are 25% of 2022 emissions or lower.
One caveat travels with this: the OBBBA prohibited-foreign-entity and material-assistance rules do apply to storage for construction beginning after December 31, 2025 (IRS Notice 2026-15). Component sourcing has to be documented at procurement, not at filing.
Storage is also five-year property for depreciation purposes, so the same first-year treatment that applies to commercial solar applies here. Our bonus depreciation page works through what that is worth. We install and finance these systems; we are not tax advisors, and the numbers above belong in front of your CPA before they go into a board paper.
Your annual peak demand over the previous twelve billing months decides which band you fall into. Below 500 kW is small or medium; 500 kW and above is large. The difference is worth $50/kW a year for the first five years, so it is worth pulling the interval data before sizing.
Priority status is what unlocks the $10/kWh enrollment incentive. Four routes qualify, and businesses routinely miss the fossil-generator route in particular.
Applications come through a contractor on the program's eligible list. Commercial applicants pay a $350 non-refundable fee to secure a reservation of funds; residential applicants pay nothing.
The performance term starts when the system connects to the utility's dispatch platform and runs 10 full years. Rates can be locked at the reservation date while construction proceeds, subject to the program's milestone rules.
Connecticut's statewide target is 580 MW of storage by 2030, and the commercial side of the program is well ahead of the residential side on deployed capacity. Program budgets are set annually by PURA, so rate certainty runs to the reservation date rather than indefinitely.
Under the structure effective April 1, 2026, small and medium commercial and industrial customers (annual peak demand below 500 kW) receive $325 per kW per year for years 1 through 5 and $175 per kW for years 6 through 10. Large C&I customers (500 kW and above) receive $275 per kW for years 1 through 5 and $175 per kW for years 6 through 10. Payments are based on measured average contribution during Active Dispatch events, not on nameplate capacity.
The residential side of the same restructure.
Model peak shaving against your own tariff.
The first-year deduction on storage and solar.
ConnectedSolutions business rates for MA and RI — a very different design.
Why the 2027 solar deadline does not reach a commercial battery.
Depreciation worked through on CT project costs.
We size against twelve months of interval data, quote against the published Energy Storage Solutions rates, and show the demand charge case separately.