California DER wholesale market participation could grow 2+ GW from CAISO ‘accounting change’: advocate

California's grid operator, CAISO, is proposing a change that could open up more value for home battery owners in the state. Right now, if you have a battery paired with solar and it sends extra power back to the grid beyond just covering your own home's use, that extra power typically only earns retail credit through net metering, not the higher payments available in wholesale electricity markets. A draft proposal released last month would let aggregated home batteries earn wholesale-level value for helping reduce electricity demand across any of California's 20-plus grid sub-regions, rather than being limited to offsetting only their own building's load.

An industry advocate estimates this shift could bring more than 2 gigawatts of home batteries and other behind-the-meter devices into California's wholesale power market. CAISO is expected to release a revised version of this framework around August 19. A related, separate process at the California Public Utilities Commission could further expand how home batteries and similar devices get paid, but that timeline is murkier — a final decision there may not come until sometime in 2027 or even as late as February 2028.

For homeowners in California with battery storage, or considering it, this is a sign that the financial case for batteries may improve over time, though nothing has changed yet in terms of what your utility or battery program pays today.