Forward Capacity: Getting Paid for Permanent Energy Reductions

You already know that energy efficiency upgrades save you money by lowering your utility bills. But did you know that you can also receive payment from our regional grid? If you’ve done (or are planning) a lighting, HVAC, or VFD project, received a rebate from Duquesne Light, or demonstrated energy use reduction for a LEED certified building, you might be able to increase your savings.

PJM Interconnection, our regional electrical grid, offers payment for permanent load reduction. If this seems like a strange proposition, consider that PJM forecasts and prepares for peak demand not this year, but four years in the future. They ensure electricity will be on-hand to meet those peak loads, and balancing that supply and demand is precise work. When PJM knows that your building will be operating more efficiently (aka, demanding less electricity), they can build that information into their models. So permanently avoided energy consumption becomes a commodity with real value, called forward capacity (Demand response programs are somewhat similar and applicable to temporarily avoided energy-use).

Accessing these funds can be tricky, but they are a real source of cash for commercial property owners and managers. Capacity payments are available for projects completed in the last four years, so a project you’ve already finished could generate funds to complete your next endeavor.

More good news? Green Building Alliance and CPower can help. Let us know if you've completed a project in the last four years, or when you're ready for your next project, and we'll walk you through the process. To see if your project is a good fit, contact us. And if you want to dive deeper into forward capacity market, learn more here and here.

(Disclosure: CPower collects a percentage of the payment as their fee for service as a licensed curtailment service provider. As a referral partner, GBA receives a small portion of that fee).