An attractive bipartisan energy storage tax incentive bill has been drafted by New Mexico US Senator Martin Heinrich (D-NM).
As a member of the Senate Committee on Energy and Natural Resources, introduced S. 3159, the Energy Storage Tax Incentive and Deployment Act. The bill, designed to establish investment tax credits (ITCs) for business and home use of energy storage, was cosponsored by US Senators Dean Heller (R-Nev.), Brian Schatz (D-Hawaii), Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Angus King (I-Maine), Jack Reed (D-R.I.) and Mazie K. Hirono (D-Hawaii).
“This bipartisan bill will ensure federal policy supports the integration of emerging storage technologies into our nation’s energy grid. Grid-scale energy storage will bolster system resilience during emergencies and outages, provide reliable supplemental services to the grid, and displace new investment in expensive substations and transmission lines,” said Sen. Heinrich in a press announcement.
Heinrich added, “As generation and storage technologies improve and become less expensive in the coming years, economics will drive new electrical generation consistently in the direction of clean, pollution-free power.”
“In a state with immense renewable energy potential, like Nevada, utilizing energy storage technologies are important to the affordability, efficiency and reliability of our electrical grid,” added Sen. Heller. “The Energy Storage Tax Incentive and Deployment Act will not only attract investments to our state but will also allow for our constituents to see real savings in their monthly bills. I’d like to thank Senator Heinrich for his leadership on this bipartisan legislation.”
“Our bipartisan legislation would make it easier for more renewable energy to be integrated into the grid, increasing reliability while continuing to expand our clean energy economy,” said Sen. Schatz. “By promoting more development of energy storage technologies, we can ease our dependence on foreign oil and create good, clean energy jobs in Hawaii and across the country.”
“I’ve focused on expanding energy storage for a long time now because it’s a potential game changer in our race to a clean energy future” said Sen. Franken. “This bipartisan bill creates new incentives for businesses and homeowners to invest in energy storage capacity. And by making these smart investments, we can help create a cleaner, more reliable energy grid all while supporting good jobs in Minnesota and across the country.”
Components of the Energy Storage Tax Incentive and Deployment Act:
- Bill provides the same tax incentive as currently available for solar energy in section 48 of the IRS code. All energy storage technologies would qualify, including batteries, flywheels, pumped hydro, thermal energy, compressed air, etc. To qualify for the ITC, the system must have a storage capacity of at least 5 kilowatt-hours. The IRS currently allows a limited ITC for energy storage when it is installed in conjunction with a solar or wind energy system. The bill would extend the ITC for any energy storage project in all applications, including consumer-owned, grid-connected, or off-grid.
- For residential applications, the bill provides homeowners the same credit as currently available for solar energy in section 25D. However, only battery storage is eligible for the residential ITC, and the system must have a storage capacity of at least 3 kilowatt-hours.
The Energy Storage Tax Incentive and Deployment Act has the backing of these entities:
- Energy Storage Association
- National Electrical Contractors Association
- National Electrical Manufacturers Association
“Extending the investment tax credit to energy storage is critical to accelerate transition to a flexible, efficient and resilient U.S. electric grid,” said Matt Robert, executive director of the Energy Storage Association. “This legislation demonstrates there is bipartisan agreement that reducing tax burdens on innovators and opening new opportunities for utilities, businesses and households to invest in intelligent energy systems is an effective way to modernize our energy infrastructure and create a cleaner, more reliable electric grid.”
“Energy storage is an important component of the work we do on both the utility and customer sides of the service point And this work is performed routinely by qualified electrical contractors and electricians nationwide,” said Marco Giamberardino, executive director for Government Affairs of the National Electrical Contractors Association. “Senators Heinrich, Heller and Schatz’s legislation will go along way to ensure the tax code will recognize and incentivize energy storage technology for what it is–a critical part of an integrated approach to modernizing the nation’s electric grid. These additional incentives will help usher a national transformation to a smarter and more reliable power grid. NECA thanks Senator Heinrich for his leadership on this important issue.”
“Energy storage is an essential part of a modern, flexible electricity system, providing a multitude of services that make the grid more efficient, reliable, and sustainable,” said Kevin Cosgriff, president and CEO of the National Electrical Manufacturers Association.
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