Developers of energy storage projects have complained in the past that existing regulations regarding tax credits for energy storage force projects to operate in ways that do not necessarily make the best use of storage assets.
An energy storage project can make use of the ITC only if it is part of a solar power installation and meets specific criteria.
The energy storage device must be charged by the renewable resource 75% of the time, and falling under 100% renewable charging docks the tax credit by a commensurate amount. The rule also looks backward for the first several years of a project and so could threaten the tax credit at any point during that period.
Energy storage interests are now seeking to remedy that situation. They see an opening for energy storage in a potential tax extenders bill that has been talked about recently in the context of the pending tax cut legislation that Congress is expected to vote on soon.
In one view, the tax extenders bill would provide extensions for technologies that were left out, or orphaned in Beltway lingo, when the ITC and the production tax credit (PTC) were extended in a 2015 bill.
The letter by the ESA and other storage interests is a “direct response to public discussions of an energy tax extenders bill,” Jason Burwen told Utility Dive via email. The tax extender provisions could be part of a continuing resolution that Congress must pass by Dec. 22 in order to continue funding the government. The more likely vehicle, however, would be as part of a January omnibus bill.
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