Two 5MW/10MWh battery storage units have entered commercial operation in Vermont, US, owned by Strata Clean Energy, deployed by LS Energy Solutions, and financed using the new investment tax credit (ITC).
Developer Strata Clean Energy has closed the final installments of ITC financing for the two projects totalling US$8.7 million, enlisting United Community Bank (UCB) and Enhanced Capital.
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The projects, in the towns of Georgia and Springfield, have now entered commercial operation and will provide peak shaving services to an unnamed customer, enabling it to avoid pulling power from the grid at peak demand times.
They will also allow Strata to participate in the ISO New England (ISO-NE) wholesale power market. ISO-NE covers Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont.
The first installments of the ITC financing were closed in March, which Strata claimed made these among the first standalone storage projects to be financed using the new ITC for the technology brought in under the Inflation Reduction Act in January. Another developer Eolian made the same claim about a project which it financed in February this year.
“Our Capital Markets team, alongside our partners at Enhanced Capital and United Community Bank,
demonstrated unwavering commitment in effectively navigating the investment tax credits associated
with the IRA,” said Josh Rogol, President of Strata Clean Energy.
Rogol added that Strata would look at using the ITC to finance its comparatively larger 1GWh project in Arizona, Scatter Wash, for which it recently signed a 20-year tolling agreement with local utility APS.
The new ITC for standalone energy storage should start playing a larger role in financing projects following the IRS’ recently-released guidance on transferability, direct pay and a ‘domestic content’ 10% adder. However, most sources have told Energy-Storage.news they expect financial institutions to take a while to become familiar and comfortable with energy storage, which is relatively new compared to solar or wind.
The Georgia and Springfield projects are also the first commercial deployments from system integrator LS Energy Solutions using the ‘Energy’ line of its AiON-ESS grid-scale platform, launched in September 2021. The Energy iteration offers 2-6 hours of discharge duration while the 1-hour ‘Power’ version was first deployed one year ago, in New Jersey.
Speaking to Energy-Storage.news at the Energy Storage Summit USA in March, LS Energy’s director of strategy and market analytics Ravi Manghani said the AiON-ESS is “as close to plug-and-play as it gets”.
“What we bring to the market is basically a platform that’s based off of our string inverter architecture. They are rack mountable string inverters that we package in the same container as you put the batteries in. So three quarters of the container or so would have the battery racks in them, the DC side of the equation, and then about a quarter of the container volume would be filled with string inverters, which are parallel, both on the AC and DC side. So that gives us some unique sort of attributes to a product that it’s very flexible, very modular,” he said.
