Renewable energy has come a long way in the last decade and that’s good for all of us. But a successful clean energy market and smart power grid can only go as far as advances in energy storage can take us.
With that in mind, U.S. Sens. Cory Gardner, R-Colo., and Martin Heinrich, D-N.M., introduced legislation Thursday that would expand the investment tax credit (ITC) to include standalone energy storage investments. As it is now, only a small subset of energy storage projects co-located with solar are eligible.
Why does this matter?
First, by making investment in energy storage more attractive it helps to increase the efficiency and decrease the costs of how energy companies generate and deliver electricity for all technologies.
Any energy company — whether powered by solar, wind or gas — can use energy storage to provide electricity more reliably and efficiently for their customers. By storing the electricity that’s generated and saved until it’s needed, energy storage can optimize grid operations. But because only some energy storage projects — those paired with solar — qualify for the tax credit there are limits to innovation in this space.
Members of Congress on both sides of the aisle support an “all of the above” strategy to energy, and the Gardner-Heinrich legislation helps accomplish just that.
Second, the tax credit would spur new investment in energy storage as a rapidly growing clean energy industry that already supports tens of thousands of jobs.
Businesses need policy clarity and certainty before making long-term investment decisions. The demand is already there. Consumers increasingly care about where their electricity comes from. They want clean and affordable energy options. And the power grid needs to be reliable as our economy becomes more electrified and digitalized, with more devices connected and using electricity.
Energy companies can meet this challenging demand with energy storage, but the current tax code is holding them back.
Take, for example, a business planning to spend $100,000 per year over the next 10 years on energy storage development. If that business could access the ITC, it could potentially save $148,000 on its $1 million investment over the life of the project.
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