How DEBA creates energy savings for California businesses

How DEBA creates energy savings for California businesses

California’s new Distributed Electricity Backup Assets (DEBA) program offers major funding to organizations that are interested in using a battery energy storage system to reduce their energy bills. Find out the details of DEBA – if your organization is eligible, how much you can save, and the important steps to take to capitalize on the benefits of this significant new program.

By Suraj Patel

Suraj is the Associate Manager of Solutions Engineering at Enel North America and leads the design and modeling of distributed solar, storage, and EV charging opportunities.

 

Distributed Electricity Backup Assets (DEBA) is a new state-funded program in California that incentivizes the construction of clean energy assets for emergency support to the electricity system. DEBA provides upfront investment and performance funding for new technologies installed in the state, like a new battery energy storage system, that can be dispatched to provide stability during grid emergencies. 

The funding provided by DEBA will be transformative in making battery storage accessible to more and more organizations. In this blog, we explore how DEBA will be instrumental in helping organizations access the value of battery storage in California.

The details on DEBA and how it pairs with the Inflation Reduction Act

DEBA was adopted in response to the power outages and fires seen in California in recent years. It is intended to help distributed energy resources, like battery storage, “serve as on-call emergency supply or load reduction for the state’s electrical grid during extreme events,” according to the California Energy Commission.

The funding available for eligible projects can be significant because you can combine the benefits of DEBA with the Inflation Reduction Act of 2022, which includes a significant 30% full credit investment tax credit (ITC) for battery storage. 

As demonstrated in the diagram below, participating organizations can receive up to 80% of the costs of their battery energy storage system by stacking DEBA with the ITC, or 80% of the costs through DEBA, if ineligible for the ITC. Enel can help you finance the remaining costs with zero upfront expenditure required.

Storage system finance breakdown

The distribution of the funds from the State of California will be further defined to include an upfront allocation, with the balance to be distributed over a 5-year period.

Why was DEBA enacted?

Maintaining the reliability of the electricity system in California is becoming increasingly complex as extreme weather grows, leading to more intense heat, stronger winds, increased wildfires, and generation or transmission outages. And the grid faces other challenges beyond extreme weather, energy demand is increasing at a faster pace than new utility-scale resources can be added.  

Distributed energy resources like battery storage, which are customer-sited energy assets, can be brought online much more quickly than large, utility-scale projects. In addition, these resources are, by their nature, distributed throughout the electricity system. Their operation to meet emergency needs provides distributed relief throughout the grid. 

The goal of DEBA is to prevent rolling brownouts or blackouts by increasing the number of these customer-sited resources and connecting them to be available when the electric grid is under stress. In exchange for that availability, the State of California provides funding to defray the cost of investment.

How much funding is available through DEBA? Is there a date when funding availability ends? 

California has allocated $545 million to DEBA, of which $445 million is available for distributed energy resources. The solicitation process for this grant-funding opportunity creates a limited window to access this funding. While there is no set date at which the availability of these funds ends, DEBA is a state-funded program, not a ratepayer-funded program. Therefore, there is no guarantee that the budget will be replenished, so organizations that are interested should begin exploring the program in the near-term. 

We give a full overview of DEBA in our webinar recording below – what funding is available, why you should be an early mover, and what the process looks like. We also cover this information in the remainder of this blog post.

Why should my organization consider battery storage? Why now?

The main benefit of adding energy storage is energy cost savings. When optimized for your facility’s consumption pattern and utility tariff, battery storage can help you charge and store excess energy when prices are low and switch your consumption to the stored energy when prices are high. 

In California, the savings from energy storage can be especially important in enabling economic resilience. Rates have been increasing significantly in California in recent years, and these rising energy costs present challenges for energy-intensive industries like commercial real estate, industrial manufacturing, data centers, governments, and schools that already spend a large percentage of their operational budget on their energy bills every year. 

What if my organization already has solar? How will battery storage help?

Beyond savings, there are other significant benefits to adopting battery storage. Corporate sustainability goals and California decarbonization targets have altered the way organizations think about energy, and organizations need to adopt technology that can help them manage electricity consumption from the grid. On-site storage paired with solar is a great way to leverage your facility’s infrastructure to generate and store renewable energy – and maximize the usage of renewables. 

By installing on-site solar and battery storage, organizations in California can:

  • Reduce energy costs by decreasing grid consumption when it is most expensive, shaving peak demand and shifting grid consumption from high-priced to low-priced hours.
  • Generate revenue with demand response programs by providing relief to the grid during periods of high electricity demand.
  • Enhance corporate sustainability by enabling storage to charge from solar panels instead of the grid and ensuring excess solar energy is not wasted but instead stored and leveraged when it’s most needed.

Who is eligible for DEBA benefits?

Both public and private organizations located in California who are interconnected to California’s electric grid can take advantage of this limited opportunity to defray the investment costs of battery storage. There are a number of requirements for grant recipients – a few of the key requirements include:

  • They must own or operate the battery energy storage system.
  • They must leverage the system to provide electricity supply or load reduction to California during grid emergencies.
  • The system must be available for operation over a 5-year period.

What types of energy projects are eligible for DEBA benefits?

While battery energy storage systems are the main project type we’ve discussed so far, there are a variety of different technologies that are eligible for DEBA benefits, including:

  • Load flexibility controls, supervisory control and data acquisition (SCADA) systems, demand-response aggregation software
  • Fuel cells
  • Energy storage
  • Linear generators
  • Microgrids
  • Microturbines
  • Vehicle-to-grid integration
  • Battery-backed electric vehicle charging
  • Pumped hydroelectric storage
  • Combined heat and power systems

What are the next steps for California in making DEBA funding available?

The California Energy Commission (CEC) will be conducting stakeholder meetings soon to discuss the amount of upfront funding available, as well as the amount that will be distributed over time based upon performance.

Some of the details of this opportunity will depend upon the next steps of the CEC. After the stakeholder process in November, the CEC will release its guidance, and then will conduct an RFP for the grant funding opportunity in 2024. 

How do I take advantage of DEBA? What is the process?

To maximize the value of DEBA for your organization, working with a trusted and proven energy partner is crucial. As part of one of the world’s largest renewable energy players, Enel North America has the expertise and experience to help you not only build and manage a solar and battery storage system but to help you through your application process to access DEBA benefits. The process typically looks like: 

  1. Build DEBA application with a trusted energy partner like Enel
  2. Evaluate project economics
  3. Receive funding (DEBA + Inflation Reduction Act credits)
  4. Move forward with agreements
  5. Finalize and construct project
  6. Start earning revenue and reducing energy spend 

Contact Enel today to be a first mover with a trusted partner in this landmark opportunity.