The passage of last summer’s reconciliation legislation offers energy companies new investment tax credits that could drive significant storage investment in the next decade, according to Utility Dive.
What’s going on: “For the first time, standalone storage systems will be eligible for a 30 percent investment tax credit (ITC)—and up to 70 percent with additional incentives.”
- Prior to the measure’s passage in August, energy storage systems were eligible for federal tax credits only in tandem with a renewable, such as solar.
Why it’s important: In the past, Congress has renewed investment and production credits for a year or two, but the new law keeps them in place through 2032.
- “This gives investors and developers a generous timeline for generating returns. In addition, the new law expands the limits of what can be included in calculating total project costs. … [T]he tax credit will now cover interconnection, microgrid controllers and a broader scope of components often used in clean energy systems.”
The requirements: To maximize tax credits under the new law, energy storage projects must meet two labor conditions.
- “[D]evelopers and operators must pay prevailing wages—as determined by the Secretary of Labor during construction and first five years of system operation … [and] meet registered apprenticeship requirements.”
The NAM says: The NAM recently emphasized to the federal government the need to streamline permitting and other regulatory processes when it comes to the broadened tax-credit eligibility.
- Said NAM Vice President of Energy and Resources Policy Rachel Jones, “Transparency and clarity coupled with commonsense flexibility and streamlining will bring certainty while speeding the effective and efficient use of taxpayer funds.”
Get involved: Sign up for the NAM’s Clean Energy Incentives Task Force here.