The Value of Distributed Energy Resources (VDER) tariff is New York's mechanism for incentivizing distributed BESS. It is an alternative to wholesale market participation, not an addition to it. An enrolled battery earns the energy value of its exports and capacity market revenue plus locational credits, the Locational System Relief Value (LSRV), and demand reduction incentives, known as the Demand Reduction Value (DRV) credit.

New York's seven utilities each pay out differently, and increasingly diverge through 2044. Con Edison could pay out up to $254/kW-year in 2027 and $388/kW-year by 2035. PSEG Long Island pays most in the second decade, reaching $391/kW-year by 2044. The five upstate and Hudson Valley territories sit below $98/kW-year in 2026 and top out at $184/kW-year in 2041.

Key takeaways

• Con Edison and PSEG Long Island are the two most investable territories, netting $290/kW-year and $270/kW-year over 2026 to 2049. A utility-scale battery at the same nodes nets $165/kW-year and $170/kW-year.
• Central Hudson, NYSEG and RG&E are the least investable at $57/kW-year to $80/kW-year, below their own zone's wholesale alternative of $117/kW-year to $123/kW-year.
• The DRV and capacity payments allow projects to pencil, supplying 91% of VDER BESS revenue in Con Edison in 2026 and 57% to 80% elsewhere. The DRV is a performance obligation, paid per kilowatt-hour exported during summer dispatch windows.

Con Edison leads until 2039, then Long Island capacity prices carry PSEG to $391/kW-year in 2044

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The same 5 MW, 4-hour battery settles very differently across the seven tariffs. Averaged over the horizon, VDER out-earns wholesale by 1.8x in Con Edison territory and 1.6x on Long Island. National Grid clears 14% above its wholesale alternative and Orange & Rockland matches it. However, a grid scale battery outperforms VDER in NYSEG, RG&E and Central Hudson.