U.S. Sen. Martin Heinrich, D-N.M., a member of the Senate Committee on Energy and Natural Resources, has introduced legislation that would establish an investment tax credit (ITC) for the deployment of energy storage in both homes and businesses.
The Energy Storage Tax Incentive and Deployment Act, S.3159, is co-sponsored by U.S. Sens. 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.
According to Heinrich, the proposed tax incentives are modeled on the current ITCs for solar energy and apply to either large, grid-connected energy storage systems or smaller battery systems for residential power.
“This bipartisan bill will ensure federal policy supports the integration of emerging storage technologies into our nation’s energy grid,” states Heinrich.
The senator says the bill has been backed by the Energy Storage Association, National Electrical Contractors Association and National Electrical Manufacturers Association.
“It’s critical that we do all we can to promote the use of renewable energy,” says Reed. “I’m fully supportive of establishing investment tax credits for energy storage, which plays an important role in capturing the energy generated by clean, sustainable sources such as wind and solar. Providing incentives for the creative and effective storage of energy will help prepare individual households, industry, utilities and our nation’s electric grid to navigate the future of clean power and energy efficiency.”
For commercial applications, the legislation would provide the same tax incentive as currently available for solar energy in section 48 of the Internal Revenue Service (IRS) code. All energy storage technologies would qualify, such as batteries, flywheels, pumped hydro, thermal energy and compressed air. To qualify for the ITC, the system must have a storage capacity of at least 5 kWh. The credit allowed would be the same as currently available for solar energy, including the phase-down.
Heinrich notes that the IRS currently allows a limited ITC for energy storage when it is installed in conjunction with a solar or wind energy system; however, this 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 would provide homeowners the same credit as currently available for solar energy in section 25D. However, only battery storage would be eligible for the residential ITC, and the system must have a storage capacity of at least 3 kWh.
“It’s time to set our sights on fully transitioning to running our country on clean energy,” says Merkeley.
“Developing affordable energy storage is an indispensable component of making that vision a reality,” the Oregon senator adds.
Reprinted from Solar Industry Magazine