Case study · New England
New England: how ConnectedSolutions made home batteries a peak resource
A grid sized for a few summer hours, a pay-for-performance incentive inside the efficiency plan, and a five-year rate lock that made batteries financeable.
VPP Economics has no affiliation with, sponsorship from, or endorsement by any utility, aggregator, platform, or device maker named here.
The short answer
- The problem: New England pays for a grid sized for a few summer hours. In Massachusetts, the top 10% of hours account for about 40% of annual electricity costs (NARUC, citing Massachusetts’ State of Charge study).
- The solution: treat peak reduction as energy efficiency. In 2019, Massachusetts put customer batteries into its three-year efficiency plan for the first time, paying them per kW of average performance on peak days (Clean Energy States Alliance).
- The outcome: a durable VPP. ConnectedSolutions provides about 350 MW of capacity relief across five states and cut the 2025 regional peak by about 1.3% (Massachusetts utilities).
- The verdict: cost-effective by the states’ own tests. Planned benefit-cost ratios for 2025–2027 are 1.4–1.9 for homes (Clean Energy Group). Battery owners earn about $800 a season per Powerwall, locked for five years (Tesla).
The problem: a grid built for the peak
Power systems are sized for their highest hour. Massachusetts’ 2016 State of Charge study found that the top 10% of hours accounted for 40% of annual costs, and that storage’s highest value was capacity for those peaks, not bulk energy (Clean Energy States Alliance).
ISO New England (ISO-NE), the regional grid operator, peaked at about 26 GW between 6 and 7 p.m. on June 24, 2025 (Massachusetts utilities). Two kinds of cost follow that hour. Capacity payments keep enough power plants available. Transmission costs are shared by each utility’s load at the monthly peak hour.
What the peak costs
Capacity cost New England about $1.2 billion in 2025, at clearing prices of about $2.60 per kW-month (ISO-NE Internal Market Monitor). The 2027–28 auction cleared higher, at $3.58 (ISO-NE). Transmission costs more: the regional network service (RNS) rate was forecast at about $185 per kW-year for 2025 (ISO-NE). Each kW cut from the monthly peak hour reduces the share of those costs a utility pays, which flows through to customers.
The solution: pay for performance at the peak
ConnectedSolutions began as a thermostat program in 2016 at National Grid, Eversource and Cape Light Compact. It became a full program in 2019, adding batteries and electric vehicles, and expanded to other states (EnergyHub). Its pilots were small: 57 customers from 2016 to 2019 (Clean Energy Group). Four design choices made it scale:
Inside the efficiency plan
Batteries were treated as a peak-reduction measure in the Mass Save three-year plan, so incentives come from the efficiency budget approved by regulators, not from an annual appropriation (CESA).
Per average kW, locked for five years
Massachusetts utilities pay $275 per kW of average event performance each summer. The rate is locked for five years from enrollment (Tesla).
One dispatch, many brands
National Grid contracts with EnergyHub, whose platform combines Tesla and other brands into a single resource. It took about four months and less than $500,000 to set up (DOE Liftoff).
Opt-outs without penalties
Owners can skip events. There is no penalty; missed events simply lower the seasonal average (CESA).
Thermostats are paid differently: a $50 or $100 enrollment incentive, depending on income, and $20 a year for each thermostat (Mass Save). Businesses choose daily dispatch at $200 per kW, with 30–60 events a season, or targeted dispatch for fewer events (EnergyToolBase).
What happens during an event
- The peak is forecast. Utilities target the ISO-NE system peak, which drives both capacity and transmission costs (Massachusetts utilities).
- The utility calls the event. National Grid sends notices to EnergyHub ahead of peak hours (DOE Liftoff). Batteries can be called up to 60 times between June 1 and September 30 (Tesla).
- Batteries discharge. Residential batteries discharge around 6–8 p.m.; thermostats pre-cool and run from about 5–8 p.m. (Massachusetts utilities). The average Tesla customer keeps a 20% backup reserve (Tesla).
- Owners can opt out. An opt-out lowers the season’s average kW and the payment (Tesla).
- Payment after the season. The utility validates device data and pays. Tesla keeps 20% and pays owners 80% (Tesla).
Demand response or VPP?
For batteries, ConnectedSolutions is a VPP in all but name. Batteries are aggregated across brands, dispatched by software up to 60 times a summer and paid for measured kW. Utilities still call it demand response, and it does not bid into ISO-NE markets directly. On our spectrum, the battery track is scheduled daily dispatch in season, a step beyond event-based programs such as California’s DSGS.
VPP-grade
Multi-brand control through one platform, device telemetry and grid export.
Near-daily summer dispatch
Up to 60 battery events a season, aimed at the regional peak, paid per average kW.
A market participant
Value comes from cutting peak load, not from wholesale bids. ISO-NE opens its markets to aggregations on November 1, 2026 (policy).
Money trail for one kW in ConnectedSolutions
From every customer’s bill to battery owners, per kW, per Powerwall and by resource.
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The outcomes
From pilot to region-wide program
Megawatts. Enrolled, utility and regional figures are measured differently.
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For program designers, the lesson is that the five-year rate lock, not the size of the payment, made batteries financeable. A known $275 per kW for five years lets installers and lenders count the income in advance. Developers can finance pipelines of storage projects contracted into the program (CESA). Massachusetts residents can also get a 0% interest, seven-year loan for batteries (DOE Liftoff).
By 2020, about 34,000 customers had enrolled 310 MW, more than triple the state’s Clean Peak Standard requirement (Clean Energy Group, NARUC). An evaluation of summer 2023 found 56.5 MW of load reduction from residential batteries (E3 for Massachusetts).
Average Tesla payout per home
Gross payments, not net profit. Many homes have more than one Powerwall.
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Battery performance has been reliable. Powerwall participation in events stayed above 95% from 2023 to mid-2025 (Tesla). In Rhode Island, 926 batteries were enrolled at the end of 2024. Each delivered about 5.3 kW on average across 42 events: about 7.0 kW for Tesla and 4.3 kW for Enphase (Rhode Island Energy). Businesses delivered less than expected: 82% of expected load shed and 76% of expected incentives in Rhode Island in 2024 (Rhode Island Energy).
The economic verdict
Benefit-cost ratios
Above 1.0 means benefits exceed costs. Shaded bars are ranges across utilities.
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By Massachusetts’ cost-effectiveness tests, ConnectedSolutions is a success. In 2020, active demand reduction programs returned $2.14 per dollar for homes, above the $1.78 planned, and cut the statewide summer peak by 0.9% (Clean Energy Group). National Grid credits its demand response programs with about $300 million in system benefits (DOE Liftoff).
Battery pay compared with peak costs
Dollars per kW. Not like-for-like: market capacity prices are per year; the incentive is per summer season.
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The comparison shows where the value lies. At $275 per kW, the incentive is roughly nine times ISO-NE’s current capacity price. It is justified only because peak cuts also reduce transmission charges and other costs counted in the state’s avoided-cost studies. That makes the result sensitive to assumptions. A 2026 technical study for Massachusetts found that, for the bulk grid, behind-the-meter storage peak reduction shows a net cost under the total resource cost test, because enabling the batteries is expensive (E3).
Positive, by the state’s tests
Benefit-cost ratios of 1.4–1.9 for homes, recovered through the efficiency charge.
Meaningful, predictable income
About $800 a season per Powerwall 3, locked for five years. Enough to change a battery’s payback.
A share of a stable rate
Tesla keeps 20%. Predictable income supports leases and financing.
A peak resource they control
About 350 MW across the region, with earnings incentives that vary by state.
Lessons for program designers
A locked rate is bankable
Five years of known pay per kW turned batteries into financeable assets.
Put it in a multi-year plan
Efficiency-plan money is approved for three years at a time, unlike an annual state budget.
Average kW rewards reliability
Paying on seasonal average performance, without penalties, rewards owners who rarely opt out.
One platform, many brands
An edge DERMS let the utility run a multi-brand fleet with little internal change.
Know what you are buying
Battery pay far exceeds the capacity price; the case rests on transmission and other avoided costs.
Move toward local value
National Grid’s ConnectedSolutions+ adds higher pay where local circuits are strained.
The next step is local. In 2025, National Grid launched ConnectedSolutions+ with higher incentives in 15 Massachusetts locations, plus up to $7,500 upfront for home batteries (Massachusetts utilities).
Where else the model could work
Already copying it
National Grid has run ConnectedSolutions in New York since 2016 (EnergyHub). Utility battery programs there pay about $50 per kW-year (NYSERDA).
Funding already exists
Any state with a ratepayer-funded efficiency plan could count peak reduction as a measure, as Massachusetts did.
A funding fix
A rate-funded, multi-year capacity payment could replace DSGS’s annual budget; see our DSGS case study.
Method and caveats
An independent case study for program designers, regulators, aggregators, households and other readers. Data checked October 27, 2026.
Megawatt figures come from different sources and are measured differently: enrolled, evaluated and capacity-relief MW are not directly comparable. Benefit-cost ratios are program administrators’ estimates under Massachusetts tests. Household figures are gross payments, not net profit. Cost-per-kW comparisons mix seasonal and annual values and are indicative only.
VPP Economics has no affiliation with, sponsorship from, or endorsement by National Grid, Eversource, Cape Light Compact, Unitil, Rhode Island Energy, Mass Save, EnergyHub, Tesla, ISO New England or any company named here.