Timing is Everything - Time of Use Billing that is

Time-of-Use (TOU) electricity pricing changes the value of a kilowatt-hour depending on when you use it. In simple terms, some hours cost more and other hours cost less. A home battery is one of the few tools a homeowner can use to respond to that pricing directly, by charging when rates are lower and supplying the home when rates are higher.

But whether that strategy actually saves money in New Jersey depends on the details. New Jersey is not a single “TOU market.” Rate designs vary by utility territory, and the spread between on-peak and off-peak prices can range from modest to dramatic. A battery can produce meaningful savings in some cases, produce only small savings in others, and, if paired with the wrong rate or the wrong schedule, can even increase costs.

This article walks through the economics carefully and concretely. It explains how TOU battery savings show up on a bill, how to calculate savings using marginal peak versus off-peak pricing (including battery losses), and how to estimate the real-world ceiling on savings based on battery size, power limits, and peak window length. It then applies that framework to New Jersey-specific TOU structures using example numbers from published tariffs and utility “price to compare” postings, and shows how the presence of solar and net metering can either reduce or increase the incremental value of adding a battery.

Finally, it looks forward to 2026 and the Garden State Energy Storage Program (GSESP). Because GSESP is designed to introduce new incentive pathways for storage, it has the potential to change the economics for some customers—especially where TOU arbitrage alone is not enough to justify a battery. The goal here is not to sell a battery, but to map the conditions under which TOU plus storage can make financial sense in New Jersey, and the conditions under which it doesn’t.

Quick definitions (for clarity and search relevance)

Time-of-Use (TOU) rate: A rate plan where the price per kWh depends on when you use electricity. Typically, weekdays daytime/early evening are more expensive (“on-peak”), and nights/weekends are cheaper (“off-peak”). Some utilities add a third bucket like “super off-peak.”

Battery arbitrage: Charging the battery during low-price hours and discharging during high-price hours to reduce billed usage during expensive periods.

Behind-the-meter (BTM): Equipment installed on the customer side of the meter (home solar, home battery). It affects your bill because it changes what the meter measures.

Basic Generation Service (BGS): The default electricity supply service from the utility (even though generation is procured). This is what your utility uses for its “price to compare” for supplier shopping.

Price to compare (PTC): A benchmark supply price the utility posts so customers can compare competitive supplier offers. It is usually supply-only, not delivery.

Round-trip efficiency: If you put 10 kWh into a battery and later get 9 kWh back out, round-trip efficiency is 90%. Efficiency matters because you buy extra energy while charging.

The central question: can a battery save money under TOU in New Jersey?

A battery can save money under TOU only if all three of these are true:

1. There is a meaningful price spread between the hours when you charge and the hours when you discharge.
2. Your battery can shift enough energy during the expensive hours to matter (kWh capacity) and can deliver it fast enough when you need it (kW power).
3. Your operational reality matches the rate design (weekday-only peaks, long peak windows, seasonal differences, and any minimum charges or fixed fees).

In New Jersey, this question is unusually “rate-class dependent.” Two NJ customers can both be “in New Jersey with TOU,” but the economic outcome can be dramatically different depending on:

• which utility territory they are in,
• which TOU tariff they’re actually on (and whether the supply portion is TOU or flat),
• how the on-peak window is defined,
• whether TOU applies year-round or is mostly a summer feature,
• whether they have solar and how net metering is applied on their account.

So the honest answer is not “yes” or “no.” It’s:

• Yes, sometimes: and in a few cases the spread can be large enough to be decisive.
• No, sometimes: and in many cases the spread and cycling limits make savings modest.
• And in some cases, switching to TOU without a good battery dispatch plan can increase your bill.

Let’s build the math first, then apply it to New Jersey.

How TOU battery savings actually shows up on your bill

Think of your bill as two broad buckets:

1) Fixed charges (hard to change with a battery)

Examples:

• Monthly customer charge / service charge
• Some minimum charges

A battery usually cannot reduce these.

2) Usage-based charges (where TOU + a battery can matter)

Examples:

• Supply charges per kWh (BGS or supplier)
• Delivery distribution charges per kWh
• Riders charged per kWh (many are not time-differentiated; some may be)
• Seasonal per-kWh differences (summer vs winter)

A TOU battery strategy targets the usage-based charges during expensive time periods.

The core savings formula (simple, but powerful)

A battery saves money under TOU when the cost of energy used to charge (including losses) is less than the cost of energy it replaces during discharge.

Define:

• P_peak = your all-in marginal price during on-peak (supply + delivery + applicable per-kWh riders that vary by time)
• P_off = your all-in marginal price during off-peak
• η = round-trip efficiency (e.g., 0.90)
• E_out = kWh discharged from the battery to serve your home load during peak

To deliver E_out kWh, the battery must charge about E_out / η kWh.

Approximate savings:

• Savings ≈ E_out × (P_peak − P_off/η)

This single expression explains most outcomes:

• If P_peak is only slightly higher than P_off, savings per kWh discharged is small.
• If P_peak is dramatically higher, savings can be large even after efficiency losses.
• If you can only discharge a small amount during peak (because your battery is small or you reserve it for backup), total annual savings stays limited.

The “ceiling” on savings: you can only shift so much energy

Even with a huge price spread, a residential battery is constrained by:

Usable energy (kWh)

A common home battery might have ~10–15 kWh usable. That means you can only shift that many kWh per cycle.

Power (kW)

If your home demand spikes to 6–10 kW during peak, but your battery/inverter can only supply 5 kW, you’ll still buy some peak power from the grid.

Peak window length

In many NJ TOU structures, the on-peak window is long (often 12–14 hours on weekdays). A battery can cover part of that window, not all of it, unless you have multiple batteries or unusually low load.

Weekday-only peaks

If weekends are off-peak all day, you may have fewer “good” arbitrage days per year than you intuitively expect.

New Jersey context: why TOU spreads matter more here than you’d think

New Jersey residential rates commonly include:

• seasonal effects (summer vs winter),
• tiering for some rate classes,
• and, on certain TOU rate schedules, cost recovery for capacity/transmission that is heavily concentrated into on-peak kWh.

That last point is important: if a tariff concentrates large system costs into on-peak kWh, the on-peak per-kWh price can become very high, and the off-peak price relatively low. That structure is exactly what a battery needs for strong arbitrage.

But it can cut the other way: if a TOU tariff has only a modest spread, arbitrage savings may look real but remain small in annual dollars.

Which NJ customers are even eligible for TOU?

New Jersey’s big investor-owned utility service territories include:

• Public Service Electric & Gas (PSE&G)
• Jersey Central Power & Light (JCP&L)
• Atlantic City Electric (ACE)
• Rockland Electric (RECO)

TOU availability and the type of TOU vary by utility and tariff. Some territories have long-standing TOU options; others have limited or discontinued residential TOU tariffs.

Because battery economics depends on the tariff, you can’t evaluate a NJ battery investment without first identifying:

1. Your utility territory
2. Your current rate class
3. The TOU rate(s) you could actually enroll in
4. Whether your supply is BGS or a third-party supplier, and whether that supply is TOU or flat

Real NJ TOU structures and what they imply for battery savings

This section uses example numbers from publicly posted tariffs and price-to-compare tables to show how different the outcomes can be.

Case A: PSE&G “RLM” style residential TOU (high spread structure)

In a PSE&G residential load-management TOU structure:

• On-peak is weekdays daytime into evening (a long window).
• Off-peak includes nights and all weekends.
• Summer delivery charges can be much higher on-peak than off-peak.
• Supply “price to compare” components can include on-peak transmission charges while off-peak transmission is effectively zero in the posted structure.

Why this matters:
If large chunks of supply and delivery costs are allocated primarily to on-peak kWh, then each kWh you avoid during on-peak is worth a lot more, making battery discharge during on-peak much more valuable.

Example: “all-in variable” energy price spread (illustrative)

Using a combination of:

• posted supply components (energy + transmission) by time period
• posted delivery distribution charges by time period and season

You can see a pattern like:

• Summer on-peak can be very high (supply + delivery)
• Summer off-peak can be very low
• Winter on-peak still high (because supply components may remain time-differentiated)
• Winter off-peak moderate

What this means for a battery

If the spread is very large:

• Savings per kWh discharged can be very large even after efficiency losses.
• A single daily cycle on weekdays can add up to meaningful annual savings.
• The battery becomes a tool not just to “save a little,” but to control exposure to expensive on-peak pricing.

The catch

A high-spread TOU tariff is often “high reward, high responsibility”:

• If you do not actively shift load out of on-peak (battery + behavior), your bill can increase.
• The on-peak window is long; a small battery may cover only part of it.
• If your home has large weekday daytime loads (work-from-home + strong summer cooling), you can burn through a single battery quickly and still pay significant on-peak usage.

So the battery can be financially helpful, but it is helping inside a tariff that can be unforgiving if you don’t manage it.

Case B: JCP&L “Residential Time-of-Day” style TOU (moderate spread structure)

In JCP&L-style residential time-of-day service:

• On-peak is weekdays daytime (often defined around an 8 AM to 8 PM window).
• Off-peak includes nights and all weekends.
• Delivery distribution charges may be meaningfully higher on-peak than off-peak in summer.
• Supply price-to-compare values show separate on-peak and off-peak benchmarks.

Why this matters:
This is a more “classic” TOU structure where the spread exists, but may be moderate enough that annual savings are limited by battery throughput and the number of good arbitrage days.

Example: supply-only spread can be meaningful

When the posted supply PTC values differ between on-peak and off-peak, arbitrage works because you’re buying supply cheaply and avoiding buying supply expensively.

Summer delivery spread can help

If the delivery portion also has a summer on-peak premium, your all-in spread increases, and the battery value improves.

The practical ceiling

If on-peak applies only on weekdays:

• Your “best” arbitrage days are roughly ~5 days per week.
• Even if you cycle daily on weekdays, total discharged energy may only be a few thousand kWh per year.
• Multiply a moderate savings-per-kWh by a few thousand kWh, and you often land in “hundreds of dollars per year,” not “thousands.”

That doesn’t mean it’s bad, it means the outcome is very sensitive to battery cost, battery size, and whether you can shift most of your peak usage.

Case C: Rockland Electric (RECO) style multi-period TOU (peak / off-peak / super off-peak)

Rockland Electric’s posted supply benchmark for TOU can include three buckets:

• Peak
• Off-peak
• Super off-peak

Why this matters:
A three-tier structure can be excellent for batteries, because:

• “Super off-peak” is often overnight, making charging easy.
• “Peak” is often late afternoon/early evening, aligning with household peaks.

For a battery, the best strategy is typically:

• charge during super off-peak
• discharge during peak
• avoid using the battery in “middle” periods unless needed

Even if the spread isn’t as extreme as the most aggressive structures, a dedicated super off-peak bucket can make battery scheduling cleaner and more repeatable.

Case D: Atlantic City Electric (ACE) territory (limited residential TOU availability historically)

In Atlantic City Electric territory, some residential TOU rate schedules have been eliminated historically, and many customers may not have a straightforward residential TOU tariff to enroll in today.

Why this matters:
If you are on a largely flat residential tariff, a battery by itself typically cannot “create” bill savings through arbitrage. It can still provide:

• backup power value,
• solar self-consumption benefits (depending on how credits work),
• and potentially future program revenue if storage incentives expand.

But if your question is strictly “TOU arbitrage savings,” limited TOU availability can be the deciding factor.

New Jersey example calculations (with real posted benchmark numbers)

This section turns the earlier formula into concrete examples.

Assumptions used in the examples

These are not “battery brand” assumptions; they’re just math assumptions to translate TOU spreads into annual dollars.

• Round-trip efficiency η = 0.90
• Battery discharges E_out = 10 kWh per on-peak weekday (think: one cycle, not necessarily full battery)
• Arbitrage days: ~260 weekdays/year
• Summer period: June through September (4 months)
• Winter period: all other months (8 months)
• We focus on the “marginal” energy price difference; fixed charges don’t change with battery dispatch.

Example 1: JCP&L-style TOU (moderate spread) - estimated weekday arbitrage value

Using posted supply benchmarks and posted delivery distribution charges for the TOU tariff, you can compute:

1. Determine summer and winter all-in marginal prices:

• Summer on-peak price per kWh
• Summer off-peak price per kWh
• Winter on-peak price per kWh
• Winter off-peak price per kWh

2. Compute savings per kWh discharged:

• Savings per kWh ≈ P_peak − P_off/η

3. Multiply by annual discharged kWh during peak.

What the math commonly shows in moderate-spread NJ TOU:
A single battery cycling ~10 kWh per weekday often lands around a few hundred dollars per year in pure TOU arbitrage value, sometimes less, sometimes more, depending on the exact spread and whether delivery is strongly time-differentiated.

This is the “reality check” region: you can have real savings, but not enough to justify a battery on arbitrage alone unless installed cost is very favorable or you stack other value streams.

Example 2: PSE&G RLM-style TOU (high spread): estimated weekday arbitrage value

In a higher-spread structure where supply and delivery costs are heavily concentrated into on-peak kWh, the same exercise can show savings per kWh discharged that is multiple times larger.

What the math can show in high-spread structures:
Even with the same operational assumption, 10 kWh discharged on peak weekdays, the annual savings can land closer to high hundreds of dollars per year, and with larger discharge volumes can exceed $1,000/year.

This is where TOU arbitrage becomes a serious economic lever rather than a small optimization.

The key takeaway from the examples

New Jersey is not a single “TOU market.” It’s a set of different TOU designs.

A battery is not “worth it in NJ” or “not worth it in NJ” in the abstract.

It can be:

• high-value under a high-spread TOU structure where you can actually shift substantial peak kWh,
• moderate-value under classic TOU spreads (often hundreds per year),
• near-zero bill-savings on mostly flat tariffs (unless other programs pay you),
• or even negative-value if you move onto TOU but don’t successfully manage peak usage.

Solar + battery under TOU in New Jersey: how net metering changes the story

If you have solar, you need to understand how net metering credits work because it can either:

• reduce the incremental value of a battery (because exports already get strong credit), or
• increase the value (because a battery helps you avoid being paid a lower value at true-up for surplus you can’t use).

How net metering typically creates value

At a high level, net metering means your meter tracks:

• electricity delivered from the grid to your home
• electricity received by the grid from your solar system

If you export more than you import over a period:

• you build a credit balance
• that balance can be applied to future bills
• at an annual true-up, leftover credits may be paid out at a lower “avoided cost” value depending on the rules and supplier situation

Why this matters for batteries

A battery can:

1. Increase self-consumption of solar (use your own kWh later instead of exporting it now).
2. Reduce the chance you end the year with unused surplus that is compensated at a lower value.
3. Shift solar value into peak hours if your rate credits exports in a way that makes timing matter.

The “NJ-specific” nuance to watch

In parts of NJ, net metering credits may be tracked as kWh banked credits that roll forward and are applied later, with an annual true-up that pays out any remaining banked credits at avoided cost (particularly for customers on utility supply and depending on supplier arrangements).

If your solar system is sized so that you often end the year with leftover banked credits:

• a battery can reduce those leftovers by storing energy that would otherwise be exported
• that can create a real financial benefit beyond pure TOU arbitrage

But if your solar system is sized so you consistently use nearly all your generation:

• the battery’s incremental bill-savings value is usually smaller and depends more on TOU spreads and operational strategy.

Battery dispatch strategy that fits NJ TOU realities

A battery is not a magic device; it’s a scheduling machine. In NJ TOU, scheduling matters because on-peak windows can be long and weekday-only.

Here are dispatch strategies that map to common NJ TOU designs.

Strategy 1: “Peak shaving” (most common and most reliable)

Goal: Discharge only during the most expensive slice of on-peak.

How:

• Charge during off-peak overnight (or super off-peak).
• Hold charge through daytime.
• Discharge starting late afternoon into evening (for example, the 4–6 hours that align with the highest household load and highest price exposure).
• Stop discharging when you hit your backup reserve.

Why it works in NJ:

• Many NJ TOU windows define on-peak across a broad daytime span, but your household peak often clusters later in the day.
• If you dump the battery too early, you may have nothing left for the expensive evening window.

Strategy 2: “TOU arbitrage maximizing” (more aggressive)

Goal: Use as much of the battery as possible on each on-peak weekday.

How:

• Charge fully overnight.
• Discharge across a longer portion of the on-peak window (not just evening).
• Recharge only during off-peak.

Where it makes sense:

• Very large TOU spreads (where each discharged kWh is extremely valuable)
• Homes with enough off-peak charging time and adequate service capacity to recharge nightly

Where it can backfire:

• If your on-peak window is too long relative to battery size, you may still have large on-peak imports.
• If you set a high backup reserve, you’ll have less usable energy.
• If you have solar and want to preserve battery capacity for midday solar capture, pure overnight charging may not be optimal.

Strategy 3: “Solar capture + peak discharge” (solar-plus-storage TOU)

Goal: Use solar to charge the battery, then discharge during peak (especially evening).

How:

• Let solar charge the battery midday.
• Discharge during late afternoon/evening on-peak.
• Use grid charging overnight only if needed.

This strategy is attractive when:

• you want to minimize grid charging,
• you have high solar export and want to increase self-consumption,
• you want to preserve off-peak charging for EV charging or other loads.

Strategy 4: “Program-first dispatch” (likely relevant with GSESP-style performance incentives)

Goal: Keep the battery available to discharge when called upon by a grid program, while still capturing TOU savings on non-event days.

How:

• Maintain a minimum state-of-charge during program event windows.
• Discharge during event windows when compensated.
• Use remaining capacity for TOU arbitrage.

Tradeoff:

• You may give up some TOU arbitrage opportunities to remain eligible for program payments.
• If program payments are high enough, that trade is worth it.

Common reasons TOU batteries fail to save money in NJ

These are patterns that show up repeatedly when people run the numbers after the fact.

1) The customer is not actually on a TOU tariff that applies to most kWh charges

Sometimes:

• the supply is flat (third-party supplier plan), and only delivery is TOU,
• or the TOU rate only applies in summer,
• or the account isn’t truly billed on time-differentiated kWh even if the customer believes it is.

If only a small portion of your all-in bill is time-differentiated, arbitrage value shrinks fast.

2) The on-peak window is long and the battery is too small

A 10–15 kWh battery can cover:

• a few hours of typical household load,
  not:
• an entire 12–14 hour on-peak weekday.

If you still buy a lot of on-peak kWh after the battery is empty, you’re still exposed to the expensive portion.

3) The battery is operated too conservatively

If you keep a high backup reserve (for outages):

• you reduce the energy available for arbitrage
• sometimes by half or more

That can cut annual savings dramatically.

4) Charging happens at the wrong time

If the battery charges during shoulder or even on-peak hours (due to misconfigured schedules, storm-watch modes, or solar behavior), you can wipe out arbitrage savings.

5) Expectations are set by average $/kWh, not marginal peak $/kWh

Batteries don’t save money off “average rate.” They save money off “what you avoided buying during peak.” If the peak/off-peak spread isn’t large, the battery may still “feel” active but doesn’t translate into large $ savings.

The 2026 wildcard: how GSESP could change home battery economics in NJ

Now to the forward-looking part: the Garden State Energy Storage Program (GSESP) is designed to roll into a second phase in 2026 that includes distribution-connected storage, explicitly including behind-the-meter systems.

That matters because it can introduce new value streams that don’t depend solely on TOU arbitrage.

Why incentives can change the story more than rate spreads

TOU arbitrage value is limited by:

• battery throughput (kWh you can cycle)
• the number of peak days per year
• the spread per kWh

An incentive program can:

• reduce your upfront cost (making modest annual savings acceptable), and/or
• pay you annually for performance (creating a second income stream that stacks on TOU savings)

Two broad incentive “shapes” that matter for residential batteries

Based on how storage programs are often structured (and how GSESP is described conceptually), you can think in terms of:

1) Fixed incentive (upfront or capacity-based)

A fixed incentive reduces the effective installed cost of a battery. It improves payback even if your TOU savings are only moderate.

If:

• installed battery cost = C
• fixed incentive = I
• annual bill savings = S

Then simple payback changes from:

• Payback = C / S
  to:
• Payback = (C − I) / S

Even a moderate incentive can be decisive when S is only a few hundred dollars per year.

2) Performance incentive (annual payments for dispatch)

A performance payment can stack with TOU savings:

If:

• annual program payment = G
• annual TOU bill savings = S

Then:

• Payback = C / (S + G)

This is how batteries can become financially compelling even in markets where TOU spreads alone are not enough.

What “performance” usually implies in practice

If you are paid for performance, you may need to:

• allow dispatch during certain event windows (often peak grid hours)
• maintain availability (keep a minimum charge level)
• meet measurement and verification requirements (smart meter intervals help)
• possibly enroll through an aggregator

That can constrain your ability to do pure TOU optimization, but the payment is designed to compensate you for that.

The key 2026 question to watch

For residential customers, the most important design question is:

Will behind-the-meter residential batteries be eligible for meaningful incentives directly, or primarily through aggregations and performance events?

If the program’s behind-the-meter incentives are strong and accessible:

• the economics can shift from “battery mainly for backup” to “battery for backup + bill control + revenue.”

If the program focuses more on larger distributed or commercial installations:

• the residential impact may be smaller.

But the core reason GSESP matters is that it creates the possibility of stacked value streams in NJ that go beyond TOU arbitrage.

A practical decision framework for NJ customers (battery + TOU + GSESP)

If you want a structured way to decide whether a battery can save money under TOU in NJ, use this checklist.

Step 1: Identify your tariff reality

• Utility territory (PSE&G, JCP&L, ACE, RECO)
• Current rate class (from your bill)
• Whether a residential TOU rate is available and what the on-peak window is
• Whether your supply is BGS or a third-party supplier
• If third-party: is supply TOU, flat, or something else?

Step 2: Estimate your peak exposure

Look at:

• weekday daytime and evening usage (especially summer)
• HVAC usage patterns
• EV charging patterns (if any)

If most of your usage is already off-peak, arbitrage value shrinks.

Step 3: Determine how much energy you can realistically shift per peak day

This is not your battery nameplate. It’s:

• usable kWh × (1 − backup reserve)
• limited by discharge power (kW)
• limited by how many hours of load you actually need to cover

Step 4: Calculate savings per kWh discharged

Use:

• P_peak − P_off/η
  Then multiply by:
• kWh discharged during peak per day
• number of peak days per year

Step 5: Test sensitivities (because small assumptions matter)

Change:

• battery efficiency (0.85–0.92)
• discharged kWh per peak day (conservative vs aggressive)
• summer vs winter strategy
• backup reserve (10% vs 30% vs 50%)
• whether you will still discharge on some days when outages are more likely

Step 6: Add potential GSESP value streams (for 2026 planning)

Model:

• a fixed incentive reducing cost
• and/or an annual performance payment

Then recompute payback:

• Payback = (C − I) / (S + G)

This is the cleanest way to see whether GSESP turns “not attractive” into “attractive.”

Frequently asked questions (SEO-friendly)

Can a home battery save money with TOU rates in New Jersey?

Yes, it can, if your TOU tariff has a meaningful peak/off-peak spread and you can discharge a meaningful amount of energy during peak hours consistently. In moderate-spread TOU structures, savings are often in the hundreds of dollars per year for a single battery; in high-spread structures, savings can be substantially higher.

Why do outcomes differ so much between NJ customers?

Because “TOU in NJ” is not one thing. It depends on:

• which utility territory you’re in,
• which residential TOU tariff you can actually enroll in,
• and whether TOU applies to supply, delivery, or both.

Do weekday-only peak hours reduce battery savings?

Yes, because they reduce the number of high-value discharge days. If weekends are off-peak all day, you generally don’t want to discharge for arbitrage on weekends.

If I have solar, do I still benefit from a battery under TOU?

Sometimes. A battery can:

• reduce reliance on the grid during peak,
• increase self-consumption,
• and reduce the chance you end the year with surplus credits that pay out at a lower avoided-cost value.
  But the incremental bill savings depends on how your net metering credits are applied on your TOU account.

What is the biggest mistake people make when evaluating TOU battery savings?

They use average $/kWh instead of the marginal peak/off-peak difference, and they assume the battery can cover the entire peak window. In NJ, peak windows can be long; a single battery often covers only part of it.

How could GSESP in 2026 improve battery economics in NJ?

If the program provides:

• a fixed incentive that reduces installed cost, and/or
• a performance incentive that pays annually for dispatch during grid peak needs,
  then batteries can become more financially attractive even when TOU arbitrage alone is modest.

Glossary

BGS (Basic Generation Service): Utility-provided default supply, reflected in posted “price to compare” values.

Delivery charges: Regulated utility charges for distribution and other delivery-related components.

On-peak / off-peak / super off-peak: Time buckets used to price energy differently.

Dispatch: When the battery charges or discharges based on schedule or control signals.

Avoided cost of wholesale power: A wholesale-based value often used for annual true-up payouts for unused net metering credits.

Performance incentive: Payments tied to measured battery discharge or availability during specified hours or events.

Fixed incentive: An upfront or capacity-based payment intended to reduce the cost barrier to installing energy storage.