Dive Brief:

Independent System Operator-New England (ISO-NE) on Monday became the first capacity market to accept an aggregated residential solar-plus-storage bid, awarding Sunrun for 20 MW of distributed grid capacity to be online in 2022.

The contract is relatively small, but it represents enough solar and storage systems for about 5,000 homes, subject to change based on adjustments in battery sizing over the next three years, according to Chris Rauscher, Sunrun's policy and storage market strategy director.

Besides bidding in at competitive prices, Sunrun's storage component provides direct backup power to customers, increasing the grid's resilience.

Dive Insight:

Through this landmark bid, market prices are lowered for everyone else, Rauscher said, which in turn lowers retail rates for customers in the region.

Massachusetts, Vermont, New Hampshire and Rhode Island have policies such as net metering in place to spur the development of residential solar and energy storage. For example, Massachusetts offers net metering incentives to install distributed solar, additional solar renewable energy credits and, more recently, an adder for storage through the Solar Massachusetts Renewable Target program.

"If we didn't have good bedrock solar policy in these states over the last decade or so, you would not have been able to introduce batteries and we would not have been able to aggregate them and get them into this market," Rauscher told Utility Dive.

"We are likely the only resource that not only cleared in the market and is helping to lower costs and create a cleaner grid, but we are also providing resilient backup power if that grid should go down," he said.

ISO-NE allowed hybrid resources to participate in its 2022-2023 capacity market auction held Monday. Other regional transmission operators are assessing the entrance of hybrid resources to comply with Federal Energy Regulatory Commission's Order 841, which directs grid operators to create rules to open up wholesale energy, capacity and ancillary services markets to battery resources.

"ISO-New England and Sunrun are just the tip of the spear and there's a big spear behind us," Rauscher said.

Rauscher credited ISO-NE for working closely with new resources "to find the right pathway through the existing rules to participate in the market."