UL 9540 from 2016 to Today:

How a Young Standard Reshaped Energy Storage Safety

 

INTRODUCTION

In less than a decade, UL 9540: Standard for Energy Storage Systems and Equipment has gone from a brand-new concept to the de facto standard for commercial and residential battery energy storage in North America. First published in 2016, the standard has gone through three major editions, each one responding to rapid changes in technology, fire-safety knowledge, and installation codes such as NFPA 855.

UL 9540 has changed how manufacturers operate, as well as how Authorities Having Jurisdiction (AHJs), fire officials, and electrical inspectors evaluate projects. UL9540 defines what to look for on drawings, what documentation reviewers should expect in permitting applications, and how comfortable inspectors feel when they approve systems that can store tens, hundreds, or thousands of kilowatt-hours of energy in one place.

This topic traces UL 9540’s evolution from its First Edition (2016), through the Second Edition (2020), and into the Third Edition (2023, with 2025 revisions), highlighting:

• The key regulatory and safety requirements in each edition
• How each version improved on the previous one
• The practical impact on AHJs and inspectors

Development of UL9540

UL9540 was developed in response to emerging safety concerns, the rapid evolution of lithium battery technology, and the need for system-level certification that extended beyond simply testing individual components.

Two major factors drove the development UL9540:

• Emerging lithium-based energy storage
• Increasing numbers of fires and safety incidents

The Rise of Lithium-Based Energy Storage (2010–2014)

In the early 2010s, lithium-ion batteries began moving from consumer electronics into:

• Residential solar + storage systems
• Commercial backup power
• Utility-scale energy storage projects

Before UL 9540 existed, the standards were:

• UL 1973 → stationary battery modules (component-level)
• UL 1741 → inverters and power conversion equipment
• UL 9540A (in development) → fire-propagation test method

However, there was no standard evaluating an ESS as a complete, integrated system, including the battery, BMS, inverter interactions, enclosure, wiring, thermal management, and safety controls. This gap became unacceptable as systems increased in size and energy density.

Early Fires and Safety Incidents

Between 2011 and 2014, several ESS fire events in the U.S. and elsewhere raised urgent safety concerns. Investigators found that the problem was not just the battery cells, but the interaction of the entire system (thermal runaway propagation, enclosure behavior, protection logic, charging controls, and so on) that contributed to the fire.

This insight prompted regulators and standards developers to recognize that component-level certification was insufficient for an ESS.

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EARLY UL DEVELOPMENT

UL Begins Developing a System-Level ESS Standard (2014–2015)

Recognizing the need for a unified evaluation method, Underwriters Laboratories initiated the development of a new standard focused on:

• Overall system safety
• Fire and electrical hazards
• Thermal management
• Communication between components
• Installation and operational behavior

During this period, UL worked closely with:

• ESS manufacturers
• Battery chemistry experts
• Fire protection engineers
• NFPA and IFC technical committees
• Utilities and AHJs

Stakeholder meetings, technical workshops, and draft reviews led to the development of the first framework, which ultimately became UL 9540.

Integration with UL 9540A (Fire Propagation Testing)

At the same time, UL began developing UL 9540A, a large-scale fire test designed to measure:

• Thermal runaway onset
• Propagation behavior
• Off-gas production
• Flame and heat release characteristics

Although UL 9540A was published separately, it became an essential input to UL 9540 system certification and later to NFPA 855 and the International Fire Code.

This co-development was a significant aspect of UL 9540’s development.

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UL 9540 FIRST EDITION (2016)

In 2016, UL officially released:

• UL 9540 – Standard for Energy Storage Systems and Equipment (First Edition)

The first edition provided:

• A system-level safety framework
• Requirements for integrated AC ESS
• Evaluation of the BMS + battery + PCS as a unified product
• Mechanical, electrical, and environmental tests
• Basic enclosure and thermal safety criteria

This publication marked the first time manufacturers could receive ESS-level certification, not just component listings.

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When UL 9540 was first introduced in late 2016, the codes and standards were fragmented.

• Batteries were covered by UL 1973
• Inverters were covered by UL 1741

UL 9540 was the first system-level standard that tied the pieces together. Manufacturers could receive ESS-level certification, not just component listings. The First Edition (ANSI/CAN/UL 9540:2016) defined requirements for energy storage systems intended to receive electric energy and store it for later use, covering both stationary and mobile, and indoor and outdoor systems.

Key elements:

• System-level safety: Safety related to enclosures, controls, interconnections, and thermal management, as well as requirements for integrated AC ESS.
• Electrical performance testing: Verifying ratings, abnormal operation, short-circuit behavior, and protective functions, as well as evaluation of the BMS + battery + PCS as a unified product.
• Mechanical and environmental tests: Vibration, impact, ingress protection, temperature/humidity cycling, and basic enclosure and thermal safety criteria.
• Product markings and instructions: Labels, installation manuals, and warnings.

Most early UL 9540 listings were integrated systems. A battery paired with a specific inverter and controls, evaluated as one self-contained ESS. UL’s first UL 9540 certification was issued to an Enphase home energy storage system in 2016, which illustrates this “fixed pairing” approach.

Relationship with AHJs and Inspectors

For AHJs and inspectors, the UL9540 First Edition simplified their job.

• It provided them with a single system-level listing to search for, eliminating the need to piece together battery, inverter, and BMS compliance manually.
• It aligned with emerging NEC requirements that ESS units be certified to a recognized standard.

Limitations

However, several limitations quickly emerged:

• UL 9540 First Edition predated NFPA 855, so it was not integrated with installation rules being drafted for large battery systems.
• The first edition assumed relatively modest system sizes and simpler, integrated architectures. Grid-scale projects, modular cabinets, and DC-coupled solar-plus-storage systems emerged rapidly and were not fully anticipated.

The UL 9540 First Edition gave AHJs a binary check (“Is it UL 9540-listed?”), but it did not provide the tools required to manage complex ESS sites, spacing, and fire protection. That gap would drive the next revision.

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UL 9540 SECOND EDITION (2020)

Aligning NFPA 855 and UL 9540A

UL9540 Second Edition was published on February 27, 2020.

By 2019, several trends had emerged.

• High-profile ESS fires made thermal runaway and fire propagation a top concern.
• NFPA 855, the installation standard for stationary ESS, was finalized in 2020. NFPA included requirements for UL 9540 listing and UL 9540A fire testing.
• Larger, containerized systems and commercial/utility-scale deployments had become common.

The Second Edition explicitly addressed these concerns.

Technical and Safety Enhancements

1. Closer integration with UL 9540A
   • Large-scale fire testing (UL 9540A) became central to determining spacing, enclosure design, and maximum allowed capacity per unit.
   • Manufacturers had to bring UL 9540A data into their UL 9540 reports and installation manuals, making fire-propagation performance part of the listing.
2. Metallic enclosures and physical protection
   • For many larger systems, metallic enclosures and enhanced construction were required to contain potential fires and protect against mechanical damage.
3. Expanded system categories and applications
   • More precise requirements for indoor vs. outdoor, residential vs. non-residential, and mobile vs. stationary ESS.
4. Additional documentation requirements
   • Manuals had to specify maximum system capacity, required spacing, and installation limitations derived from UL 9540A testing and NFPA 855 tables.

The Second Edition turned UL 9540 into a bridge between product certification and installation codes.

Improvements

Differences between the First Edition and the Second Edition:

• Fire-propagation behavior is a core safety attribute, not an afterthought.
• Performance-based data. UL9540A test results and spacing between equipment enhanced decision-making. Separation distances and room layouts were now based on test results rather than guesswork.
• Addressed large containerized systems, which had become common in utility and C&I markets.

Impact on AHJs and Inspectors

For AHJs, the Second Edition brought both clarity and complexity:

• Clarity
  Because NFPA 855 explicitly required ESS units to be listed to UL 9540 and tested to UL 9540A, UL 9540 became the accepted “stamp of approval” for system-level safety.
• Complexity
  Inspectors now had to:
  • Read and interpret UL9540A test summaries
  • Verify installation spacing with the manufacturer’s UL-based tables
  • Understand that the UL9540A performance results may result in different spacing requirements for different systems.

Some AHJs quickly adopted checklists to align UL 9540 listings with NFPA 855 placement rules, while others struggled with the learning curve, especially when training and resources were limited.

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THIRD EDITION (2023–2025)

AC ESS, DC ESS, and Functional Safety

By the early 2020s, the technology landscape shifted again:

• DC-coupled solar + storage and flexible “DC ESS + separate inverter” architectures exploded in popularity.
• ESS projects grew in scale and complexity, with a variety of chemistries.
• Codes like NFPA 855 and the International Fire Code were updated, further integrating UL 9540A as the preferred fire test method.

The Third Edition of ANSI/CAN/UL 9540, issued on June 28, 2023, was designed to “keep pace with rapidly advancing technology” and better align with installation codes.

New Concepts and Safety Requirements

1. Formal distinction between AC ESS and DC ESS
   • AC ESS: integrated systems that include the inverter as part of the ESS listing.
   • DC ESS: systems that output DC power and are designed to connect to separately listed power-conversion equipment (PCE), such as UL 1741 or UL 62109-1 inverters.
   • Both AC and DC ESS are evaluated under the same safety framework, including UL 9540A-based fire testing and system-level protections.
2. Alignment with NFPA 855 and fire codes
   • Clarified capacity and separation limits based on UL 9540A results to match NFPA 855 and fire codes.
   • Include explosion control requirements when applicable.
3. External warning and communication systems
   • New criteria for early warning and remote notification of potential ESS safety issues, to improve situational awareness for operators and first responders.
4. Expanded environmental, noise, and fluid-hazard requirements
   • Requirements for noise levels, coolant behavior (including “direct injection” systems), and management of hazardous fluids.
5. Functional safety and multi-part systems
   • 2025 revisions to the Third Edition add functional safety requirements and clarify markings and documentation for multi-part ESS, along with guidance in Annex H for residential installation instructions.

Third Edition Improvements

There are several improvements to the Third Edition, compared to the Second Edition.

• AC vs. DC ESS clarity
  • The Second Edition treated ESS as a single category, heavily biased toward integrated AC systems.
  • The Third Edition explicitly recognizes standalone DC ESS as a valid configuration, making it easier to certify modular DC batteries intended to work with multiple inverter platforms.
• Better alignment with modern codes
  • NFPA 855 and the 2024 IFC now reference UL 9540A as the preferred fire-test method. The Third Edition clarifies how UL 9540A data determines spacing and capacity limits.
• More comprehensive risk coverage
  • New requirements around explosion control, external warning systems, noise, and fluid hazards extend the standard beyond electrical and thermal tests into a holistic view of ESS risk.

The Third Edition transforms UL 9540 from a “one-size fits all” ESS listing into a flexible framework that can handle integrated AC systems, modular DC battery cabinets, and future hybrid architectures, while still imposing a common safety baseline.

AHJs and Inspectors (Third Edition)

The AC/DC distinction and modular DC ESS approach have had mixed impacts on AHJs:

• Benefits
  • For integrated AC ESS, the Third Edition continues the familiar model: one UL 9540 listing that covers the battery, inverter, and controls. Inspectors can treat it as a single appliance.
  • For DC ESS, the standard explicitly defines compatibility documentation requirements under clauses like 46.14, requiring manufacturers to maintain lists or parameters of compatible PCE. This gives AHJs a formal paper trail to review.
• Challenges
  • AHJs must now evaluate two separate listings: 1) DC ESS (UL 9540) and 2) Inverter (UL 1741 / UL 62109-1).
    Based on these two listings, the AHJ must verify that the pairing is documented as compatible in the manufacturer’s manuals.
  • Some inspectors, especially in jurisdictions new to ESS, have struggled with this more nuanced model, initially viewing “UL 9540 DC ESS + UL 1741 inverter” as a loophole rather than an intended evolution.

Even in Canada, where the Third Edition has been incorporated as an ANSI/CAN standard and referenced in the 2024 Canadian Electrical Code, many AHJs are slow to recognize DC ESS listings and modular pairings, continuing to expect fixed AC ESS packages.

SUMMARY

The table below summarizes the three editions. 

	First Edition (2016)	Second Edition (2020)	Third Edition (2023/2025)
Focus	Establish a system-level safety standard for ESS.	Align with NFPA 855 and address lessons from ESS incidents.	Keep pace with advanced architectures and modern codes. Clarify AC vs. DC ESS. Add functional safety.
Architecture	Integrated AC ESS; battery + inverter listed as one system.	More robust treatment of larger, modular systems, but still conceptually ESS as a single, integrated category.	Explicit AC ESS vs. DC ESS classification. Support flexible DC ESS paired with separately listed PCE.
Safety Features	Basic electrical, mechanical, environmental, and functional safety tests. Limited integration with fire-propagation data.	Tight integration of UL 9540A fire testing, metallic enclosures for many systems, explicit documentation of capacity and spacing limits in manuals.	Clarified capacity/separation rules tied to UL 9540A and NFPA 855, explosion control, external warning systems, noise and fluid-hazard requirements, updated markings and instructions (Annex H).
AHJ Impact	Introduced a clear “UL 9540–listed ESS” concept, simplifying approvals for early residential and small C&I systems.	Provided performance-based tools (UL 9540A data and manufacturer spacing tables) but required more technical literacy from inspectors; increased confidence for large ESS at the cost of added complexity.	Consistent treatment of integrated AC ESS and modular DC ESS under a single safety framework. Requires careful review of both battery and inverter listings along with documentation to confirm compatibility.

 

CONCLUSION

UL 9540 has evolved in lockstep with the battery energy storage industry.

• The First Edition answered a basic need for system-level safety certification, giving AHJs and installers a common reference point for early residential and C&I ESS.
• The Second Edition integrated fire-propagation testing and NFPA 855 into the standard, shifting the focus from component safety to installation-relevant performance, especially for large, containerized systems.
• The Third Edition, with its explicit AC/DC ESS framework and expanded functional-safety and communication requirements, recognizes that modern ESS may be modular, DC-coupled, and heavily software-driven while still needing a consistent safety baseline across all architectures.

Each edition has raised the profile of AHJs and inspectors.

• First Edition: Is it UL 9540-listed?
• Second Edition: Does the UL 9540A data and spacing comply with NFPA 855?
• Third Edition: Is the ESS UL 9540 (AC or DC)? Is the PCE UL-listed? Does the manufacturer’s documentation identify equipment as compatible? Does the installation match the test parameters?

As of 2025, UL 9540 is deeply embedded in North American regulations, referenced by NFPA 855, the International Fire Code, utility standards, and national electrical codes in both the United States and Canada. As energy storage technology continues to evolve, expect UL 9540 to continue to evolve with it.

Solar panels and battery storage deliver lower electricity bills, energy resilience, and long-term independence from rising utility rates. But every homeowner faces one major question: Should you buy your solar + storage system, or lease it from a third party?

On the surface, leasing seems attractive. There is low or no upfront cost, maintenance is included, and you get immediate bill savings. However, buying gives you ownership, access to rebates, and greater lifetime savings. When installing Discover Energy Systems’ HELIOS ESS lithium battery, which has the lowest-cost-per-kWh storage solution in its class, the financial advantage of ownership is more apparent than ever.

The following illustrates the costs and benefits of buying vs. leasing solar + storage.

(This article will look at the leasing option only in third-party ownership systems. We will not examine the other third-party option, the power purchase agreement.)

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Buying Solar + Storage with HELIOS ESS

Purchasing your solar + storage system means you own the equipment and all the value it produces. Rebates, tax credits, and bill savings flow directly to you—not a leasing company. With Discover’s HELIOS ESS, buyers get a scalable, high-performance battery at the best price per kWh on the market, maximizing both incentives and ROI.

Typical Costs (10 kW solar + 32 kWh HELIOS ESS battery)

Item	Cost (USD)
Solar panels (10 kW @ $1/W)	$10,000
2 x HELIOS ESS (32 kWh @ $225/kWh)	$7,200
Inverter, wiring, and peripheral equipment	$8,000
Installation & labor	$7,000
Gross system cost	$32,200
Federal ITC (30%) expires 12/2025	-$15,000
Local rebates (varies depending on region)	-$5,000
Net cost to owner	$12,200

 

NOTE: If the cost of electricity in your area is $2000 per year, the system pays for itself in about 6 years.

Financing Solar + Storage

Most people do not have the cash to purchase their solar + storage system. They will take out a loan to finance the purchase. Financing will give you all the benefits of buying, but it will add an extra cost to fund the loan.

Typical Costs (10 kW solar + 32 kWh HELIOS ESS battery + Loan)

Item	Cost (USD)
Solar panels (10 kW @ $1/W)	$10,000
2 x HELIOS ESS (32 kWh @ $225/kWh)	$7,200
Inverter, wiring, and peripheral equipment	$8,000
Installation & labor	$7,000
Gross system cost	$32,200
Federal ITC (30%) expires 12/2025	-$15,000
Local rebates (varies depending on region)	-$5,000
Loan Amount	$12,200
Financing Cost (8%)	$2,652
Monthly Payment (4 years)	$310
Net cost to owner	$14,852

NOTE: If the cost of electricity in your area is $2,000 per year, the system pays for itself in about 7.5 years.

Leasing Solar + Storage

Leasing eliminates upfront costs. You pay a fixed monthly fee while the leasing company owns the system, collects incentives, and maintains it. You benefit from bill savings, but without ownership, the leased solar + storage will provide zero, or even negative, resale value.

Typical Lease Terms (same 10 kW + 32 kWh system)

Item	Cost (USD)
Upfront payment	$0 – $1,000
Monthly lease payment	$250 – $300
Lease term	20 years
Annual cost ($250 × 12)	$3,000
Total lease payments	$60,000
Ownership at end of term	No (option to renew or buy at fair market value)

 

NOTE:

• You cannot select the desired equipment in a leased system. The solar leasing company determines the installed equipment.
• When it comes to maintenance, you are dependent on the leasing company. If the system goes down and it takes a week to restore, the homeowner must pay for power from the utility during that time and is not reimbursed for this additional expense.

Pros and Cons

The following table lists the pros and cons between purchasing, financing, and leasing your solar + storage system.

Category	Buying System with HELIOS ESS	Financing System with HELIOS ESS	Leasing System (any equipment)
Electric bill savings	PRO	PRO	PRO
Rebates & incentives	PRO	PRO	CON Rebates go to leasing company
Financing cost	PRO	CON	CON System cost is financed through lease
Maintenance	CON Estimated $300/year	CON Estimated $300/year	PRO Leasing company is responsible
Resale value	PRO Additional resale value	PRO Additional resale value	CON Buyer must assume lease
System ownership	PRO	PRO	CON Leasing company owns the system

 

Lifetime Financial Comparison (20 Years)

Metric	Buying System	Financing System	Leasing System
S	$12,200	14,852	$60,000
Total bill savings (20 yrs)	$40,000 (2,000/yr)	$40,000 (2,000/yr)	$40,000 (2,000/yr)
Rebates & ITC benefit	$20,000	$20,000	$0
Maintenance (20 yrs)	($6,000)	($6,000)	$0
Net 20-year	$21,800	$19,148	($20,000)

 

Over a period of 20 years, leasing the system costs much more than the savings you can achieve on your utility bill.

If you buy or finance the system, with rebates and utility bill savings, the system pays for itself within 6 to 8 years and nets you $20,000 in the long run.

HELIOS ESS Makes Buying Even Better

By purchasing your solar + storage system, you have a choice on what equipment to install. You don’t have to accept any system; you can ask to use the HELIOS ESS.

Discover’s HELIOS ESS isn’t just another battery—it’s engineered for value and performance:

• Lowest $/kWh on the market, stretching every rebate dollar.
• Modular, scalable design to grow with your needs.
• Long cycle life and high efficiency for better performance.
• Seamless integration with leading hybrid inverters.

Buying a HELIOS ESS system is the clear choice when you combine these advantages.

Conclusion

Leasing may sound appealing because it reduces upfront costs, but dollar for dollar, it leaves you paying significantly more over time with nothing to show for it. Buying a solar + storage system based around Discover’s HELIOS ESS ensures you get every incentive, maximize long-term savings, and add real value to your property.

If you’re serious about energy independence and financial return, buying a HELIOS ESS solar + storage system is the smarter investment.

For more information on the HELIOS ESS, click here.

Other Blogs

• FREE MONEY! Energy and Storage Rebate in California
• FREE ENERGY STORAGE! SGIP Rebate for Discover Energy's Batteries

Introduction

British Columbians looking to lower their electricity bills and embrace clean energy have allies in BC Hydro and Discover Energy Systems.

• BC Hydro offers a substantial solar and battery storage rebate for residential customers: $5,000 for solar panels and an additional $5,000 for battery storage.
• Discover Energy Systems, based in Richmond, BC, sells the HELIOS ESS lithium battery, the lowest-priced (per kWh) residential lithium battery on the market, which maximizes the benefit of adding battery storage to a PV solar system.

Read on to learn more about the BC Hydro rebate and Discover lithium batteries.

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BC Hydro Solar and Battery Storage Rebate

This rebate program is offered in coordination with BC Hydro's Self-Generation Program (formerly known as Net Metering). The self-generation program allows you to generate electricity, use what you need, and send any excess energy back to the grid for credits on your bill.

Calculating the Rebate

• Solar Panels
  $1,000 per kilowatt (kW) of installed solar panels, including installation and peripheral equipment, up to a maximum of $5,000.
• Battery Storage
  $500 per kilowatt-hour (kWh), including installation and peripheral equipment, up to $5,000. Minimum storage size of 5 kWh.

Calculating the Cost of a Solar + Battery System

Most installers will tell you that the battery storage portion of a solar + storage system is the most expensive part. The HELIOS ESS is changing that narrative.

The HELIOS ESS from Discover Energy Systems is a game-changer in the battery storage industry. Per kilowatt hour (kWh), the HELIOS ESS is priced below all its competitors. The following graph compares the cost per kWh of leading battery brands, based on data readily available on the Internet.

Based on the cost of Discover’s HELIOS ESS batteries, you can purchase MORE storage for harvested PV energy, which you can then use at your convenience.

The HELIOS ESS uses utility-grade battery cells to achieve a better price point and better performance over consumer branded energy storage. HELIOS is UL1973 and UL9540 (DC ESS 3rd Edition) certified, provides 16 kWh of energy, is IP65-rated for outdoor installations, and built to withstand Canadian weather. When designing your system with a certified installer, tell them to use HELIOS ESS lithium batteries.

The design and cost of the installed solar + storage system will be based on your energy needs. While the BC Hydro rebate can save you up to $10,000, the system can total between $40,000 and $60,000 CAD, which includes installation and other equipment. The BC Hydro rebate would cover 15 to 25% of the cost.

Example: Cost of Solar + Battery System 

Item	Cost (CAD)
Solar panels (10 kW @ $2.50/W)	$25,000
2 x HELIOS ESS (32 kWh @ $281/kWh)	$9,000
Inverter, wiring, and peripheral equipment	$10,000
Installation and labour	$15,000
Gross System Cost	$59,000
Rebates
BC Hydro Solar Panel Rebate: 50%, up to $5000	-$5,000
BC Hydro Energy Storage Rebate: 50%, up to $5000	-$5,000
Net Cost	$49,000

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Summary

Solar + Storage systems are expensive and require considerable investment. BC Hydro makes it more affordable for customers by offering up to a $5,000 rebate for solar and $5,000 rebate for battery storage. Discover Energy Systems maximizes your dollars with the HELIOS ESS, the most cost-effective lithium battery on the market.

Don’t get stuck with any system offered by your installer. Ask to use Discover’s HELIOS ESS to get the most bang for your buck.

Contact Discover to learn more about the HELIOS ESS.

Other Blogs

• BC Hydro Business Incentive and Tax Credits Cover 85% of Cost of Battery Energy Storage
• BUY or LEASE? The Real Cost of Solar + Storage Systems

Introduction

BC Hydro’s Energy Storage Incentive (ESI) covers up to 80% of a commercial Battery Energy Storage System (BESS), while federal tax credits and accelerated CCA reduce most of the remaining cost. Discover’s C&I BESS solutions deliver some of the lowest $/kWh in the market, backed by local BC support and LYNK CLOUD remote monitoring to ensure full compliance with BC Hydro’s performance requirements. The result is a low-risk, high-ROI path for businesses to invest in energy storage.

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BC Hydro's ESI program encourages businesses to install a BESS. While the BESS benefits BC Hydro by assisting in managing energy usage when the grid experiences high demand, companies also benefit, as this incentive covers up to 80% of the cost of the BESS.

In addition to the BC Hydro incentive, the remaining cost of the BESS can be partly covered by the Canadian federal government’s clean technology investment tax credit. This credit is offered to businesses that invest in new, clean technology in Canada. To make it even better, companies can write off the net capital cost of the BESS in the first year (accelerated CCA) instead of charging the capital expense over two or more years.

That means businesses can reap the rewards of their own energy supply right away, and have it primarily paid for by BC Hydro and the federal government.

The following discusses the Energy Storage Incentive in more detail.

Energy Storage Incentive (ESI)

This is a BC Hydro rebate for commercial customers installing behind-the-meter battery systems. It is tied to a 10-year commitment to supply on-demand power through Distributed Energy Resource Management Systems (DERMS).

That means BC Hydro will pay 80%* of the cost of the BESS as long as it abides by the agreement's terms and delivers the expected energy.
_{* The ESI is calculated as the lesser of three different calculations, but 80% is the typical outcome.}

Terms of Agreement

Eligibility

• The business must be a BC Hydro customer on an eligible business rate (e.g. small/medium/large general service)
• New battery installations only, with smart meter
• The design must be approved by BC Hydro before installation

BESS Performance Commitment

• Must respond to up to 2 events per day, each ≤ 4 hours, with ≥ 85% capacity available at event start
• Annual reliability ≥ 85% to avoid 10% annual claw‑back

Early termination of the 10 year agreement will trigger proportional repayment

Too Good to be True?

Like you, many businesses are wary of deals that appear too good to be true. And BC Hydro paying for 80% of an external company's BESS seems to fall into that category. Businesses are NOT clamoring all over each other to install their own BESS.

Why is that?

The answer is two-fold:

1. Investment. Despite BC Hydro covering 80% of the cost of the BESS, the investment is significant.
   For example, the cost of equipment and installation of a commercial BESS, including the inverter and peripheral equipment, could total between $500,000 and $2,000,000 CA, or more.
   Although BC Hydro’s incentive would cover 80% of this cost, the business would still be responsible for the remaining 20%, which could range from $100,000 to $400,000 CA.
2. Claw-back. If the BESS does not perform as per the terms of the agreement, BC Hydro can seek reimbursement of funds from the business.
   If the system is not configured correctly, businesses may have to return 10% of the incentive each year the BESS does not perform correctly.

Partner With Discover to Maximize Your Investment

By working with Discover Energy Systems, businesses can maximize their investment dollars.

Discover’s commercial and industrial batteries are competitively priced. Among available C&I batteries, Discover Energy Systems delivers some of the lowest cost per kilowatt hour.

 

One of Discover Energy’s flagship products, the AES 210HV Cabinet (209 kWh) with an inverter, peripheral equipment and installation, could cost between $135,000 and $150,000 CAD ($100,000 ~ $110,000 USD), which is less than most other C&I battery products available today.

Buy Local, Buy Canadian

Discover’s head office is located in Richmond, BC. Its roots are in the battery business for 75+ years in Canada. You can expect to receive excellent support for your local BC project.

Comply with BC Hydro's Performance Requirement

Discover has the tools and equipment that enable you to closely monitor and fine-tune battery performance, which is especially important in the early life of the system. To confirm the system is performing per the terms of the agreement, the system integrator can use Discover’s LYNK CLOUD to monitor the system and push event notifications to view and react to potential issues. Access to battery logs enables system integrators to identify problems and thereby modify the BESS configuration to maximize uptime, ensure energy availability, and comply with the terms of BC Hydro’s incentive program.

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Summary

Discover Energy Systems' AES 210HV, well-suited for small to medium-sized battery projects, is a C&I battery that can take advantage of BC Hydro’s Energy Storage Incentive program. The cost of this BESS is less than that of most competing products. When combined with Discover’s monitoring tools, you can ensure the BESS meets BC Hydro's requirements, reducing a business's risk. After the 10-year commitment to BC Hydro’s DERMS program, the company will have complete control over the Battery Energy Storage System.

Contact Discover Energy Systems to see if installing the AES 210HV Cabinet is right for you.

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Example to Illustrate Details About the ESI

AES 210HV (209 kWh) BESS with Sol-Ark 60K, 50% of battery capacity nominated for BC Hydro use, the other 50% for business use.
Example cost of system, including peripheral equipment and installation $150,000 CAD.

• Calculation of incentive from BC Hydro (choose the lesser of three)
  1. $10,000 × (kW nominated) → $10,000 x (60 kW x 50%) = $300,000
  2. $10,000 × (kWh nominated ÷ 4 hours) → $10,000 x (209 kWh x 50% ÷ 4) = $261,200
  3. 80% of eligible project costs (excluding ineligible items like insurance/building upgrades) → $150,000 estimated cost x 80% = $120,000
     In this example, BC Hydro offers an incentive of $120,000, while the company's cost is $30,000.

• BESS Technical Criteria
  Discover’s AES 210HV with Sol-Ark 60K inverter addresses all technical criteria.
  • ≥ 80% round-trip efficiency
  • 10-year warranty
  • UL/CSA certifications (UL 9540, UL 1973, UL 1741-SA, CSA standards)
  • DERMS connection via IEEE 2030.5, SCADA, or approved API