RMI report details battery grid roles, tax revenue, and health savings

RMI’s new report, "Stored Potential: The impacts of utility-scale battery energy storage systems on communities and the grid," outlines how these assets function within the power system.

The report highlights data from California’s September 2022 heatwave, where batteries supplied 6% of grid electricity demand. For comparison, the August 2020 heatwave saw peak demand that was 10% lower than in 2022, yet the state still experienced rolling blackouts during that period.

Grid Reliability in California

During the seven tightest pricing days in 2024, batteries supplied between 13% and 19% of the state’s total generation. In the tightest hours of that year, these systems operated at 64% capacity, a utilization rate nearly on par with the 67% achieved by gas peaker plants. By mid-April 2024, batteries had moments when they were the highest outputting electricity source on California’s main grid.

In July 2024, batteries supplied 717 GWh of electricity during peak hours. The report quantifies the financial impact of this capacity, noting that it saved $171,600 per peak hour. Over a longer timeframe, these savings amounted to $1 million per peak day, $11 million per peak week, and $29.2 million per month.

Local Economic Benefits

• Average annual local tax revenue from battery storage: $6,600 per MW of capacity.
• A 200 MW utility-scale project generates between $1.2 million and $2 million in annual local tax revenue.
• National annual tax collection from battery storage: over $290 million.
• California’s annual tax collection: $80 million.
• Texas’s annual tax collection: $60 million.
• The 150 MW battery in Carver, Massachusetts, pays the town $1.6 million annually.
• The 250 MW battery in Medway, Massachusetts, pays the town $2.3 million annually.
• The Medway project’s community agreement includes a $250,000 sidewalk fund, a $50,000 water and environmental plan, and a $50,000 annual resilience fund.
• The Medway agreement provides property value protection of up to $25,000 for homeowners within 300 feet of the facility.
• Projected US annual battery tax revenue for 2026: over $440 million.

Health and Environmental Impact

In New York, a 500 MW replacement project is estimated to save Suffolk County $5.3 million annually in health costs, according to EPA tools. Similarly, a 240 MW replacement in Texas would generate $3.8 million in annual health savings for Harris County. These localized benefits contribute to a broader national impact; if 66 GW of storage displaces gas peakers by 2030, the United States could see over $400 million in annual health savings.

A gas peaker in Chesterfield County, Virginia, incurred $16.7 million in lifetime health costs. Evidence from Pittsburgh suggests that removing coal plants can sharply reduce acute health events. Three years after the closure of a local coal plant in 2016, emergency cardiovascular admissions in the area dropped by 42%.

Medway Community Agreement and Safety Context

The Medway, Massachusetts, host community agreement also includes a $50,000 annual contribution to a community resilience fund. The report notes that by the end of 2026, all US battery projects could generate over $440 million annually in local tax revenue, an amount equivalent to the annual spending required to educate nearly 30,000 K–12 students. Regarding safety, the report cites a separate analysis showing that battery failures have declined 98% since 2018, with the shift to lithium iron phosphate chemistry aligning with these declining fire rates.

What to watch

In Texas, a December 5, 2025 rule change increased wholesale costs by $3.6 million over 24 hours. Meanwhile, operational data shows batteries actively buying power to support renewable integration; on March 20, 2026, they purchased 52,777 MWh of electricity, paying solar owners $2.2 million, according to Aurora Energy Research.

US battery failure rates have dropped 98% since 2018, and no fires have been recorded in lithium iron phosphate (LFP) systems with 100 MW or greater capacity since at least 2019.