U.S. Rep. Mike Doyle, D-Pa., introduced a bill today that would establish a federal investment tax credit for business, residential, and utility-scale use of batteries and other energy storage technologies. Among other things, the legislation seeks to establish a 30% tax credit for both commercial and residential energy storage through 2021.
That incentive would be phased down annually before leveling off to a permanent 10% tax credit after 2021 for commercial projects and zeroing out for residential projects.
The American Wind Energy Association (AWEA) applauded the proposed legislation, The Energy Storage Tax Incentive and Deployment Act. However, AWEA also notes that current law has restrictions. For example, it only permits energy storage to qualify for an ITC when paired with a solar project under certain circumstances.
“We applaud Representative Doyle for his effort to modernize the U.S. electricity supply with the Energy Storage Tax Incentive and Deployment Act,” said Tom Kiernan, AWEA CEO. “Like the power transmission lines that make up the grid, energy storage is a catalyst technology that makes the entire electricity supply more affordable and reliable. Expanding investment tax credit eligibility to all energy storage technologies would spark new clean energy infrastructure investment, grow American jobs, and help ensure our electricity supply is ready for future challenges.”
Energy storage technologies — including batteries, flywheels, pumped hydro, thermal storage, compressed air, and others — are a source of reliability services and flexibility for the power grid. Storage helps balance power supply and demand instantaneously by storing electricity from low-cost energy sources, like wind, and releasing that power during periods of high demand.
Storage systems deliver these benefits whether they are connected to the grid as an independent resource or when storage is paired with any energy source. However, current law only allows energy storage to qualify for an ITC when paired with a solar project under certain circumstances. The flexibility and market efficiencies resulting from accelerated energy storage investment would spur new wind farm development and job creation.