US Congress Urged to Clarify Eligibility of Energy Storage for ITC

on November 28, 2018

Energy-Storage-NewsThe US government has been urged to recognise the “critical role” energy storage can play in making the grid cleaner and able to accept more renewable energy, by increasing the eligibility of batteries and other technologies to receive the Investment Tax Credit (ITC).

The ITC is applicable to purchases of solar energy equipment in the US and effectively represents a 30% rebate for investors if fully realised. In recent years the policy scheme has been adjusted to include energy storage but for a long time, storage systems could only receive the Federal subsidy if installed at the same time as solar equipment.

However, a bill proposed in 2016 by Senator Martin Heinrich of New Mexico, S.1868, would amend revenue codes to apply either the ITC, similar tax relief measures or include energy stored in batteries, flywheels and pumped hydro in ‘Energy Credits’ policies. Heinrich’s “Energy Storage Tax Incentive and Deployment Act of 2017″ would therefore see storage units rewarded for the energy they put into service on the grid and now has 11 co-sponsors from the Senate.

Yesterday, a joint letter was sent by the national Energy Storage Association (ESA), Solar Energy Industries’ Association (SEIA), American Wind Energy Association (AWEA), Advanced Energy Economy (AEE), National Electrical Manufacturers’ Association (NEMA), National Hydropower Association, Clearpath Action and Citizens for Responsible Energy Solutions urging Congress to support these actions.

Addressed to Paul Ryan, Speaker of the House along with Senate Majority Leader Mitch McConnell, Minority Leaders Nancy Pelosi and Charles Schumer, the groups urged Congress to include clarification of the ITC issue as pertains to energy storage as eligible under two tax codes, Sections 48 and 25. Referring to the bicameral and bipartisan support of the 11 co-sponsors, the authors described S.1686 as a “common-sense bill” which would “ensure a level playing field” for storage to compete with other ITC-eligible resources.

“Without clear statutory rules, energy storage industry members face continuing uncertainty from IRS guidance about the eligibility of energy storage equipment for Section 48 and 25 tax credits when paired with ITC-eligible resources,” the letter stated.

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Fractal Energy Storage ConsultantsUS Congress Urged to Clarify Eligibility of Energy Storage for ITC