SECTION 1. Section 5 of chapter 59 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after clause forty-fifth A the following clause:-

Forty-fifth B. Any energy storage system, as defined in Chapter 188 of the Acts of 2016, which is being utilized for the energy needs of property taxable under this chapter; provided, however, that the exemption under this clause shall be allowed only for a period of twenty years from the date of the installation of such system or device.

SECTION 2. On or before January 1, 2021, the department of energy resources shall establish and maintain an incentive program supporting the installation of energy storage systems, as defined in Chapter 188 of the Acts of 2016, on customer premises. The department may consider the following funding sources for said incentive program, including but not limited to: the use of alternative compliance payments and the use of energy efficiency funds under section 19 of chapter 25 of the General Laws if the department determines that the energy storage system installed at a customer’s premises provides sustainable peak load reductions on either the electric or gas distribution systems or is otherwise cost-effective and consistent with section 11G of chapter 25A of the General Laws. The department shall implement this program consistent with its authority under section 11G of chapter 25A of the General Laws and may promulgate regulations consistent with this section.

SECTION 3. Section 6 of Chapter 64H of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by inserting after subsection (xx) the following subsection:-

(yy) Sales of energy storage systems, as defined in Chapter 188 of the Acts of 2016, until the date of December 31, 2025, at which time energy storage systems shall not be exempt under this section.