Iowa economic development officials are tentatively endorsing a tax credit for battery storage to complement the state’s wind and solar generation.
The tax credit is one of several recommendations made in a recent report on energy storage opportunities by the Iowa Economic Development Authority. Others include targeting grant money and conducting additional research, including a “value of storage” analysis.
“We are seeking to move the needle,” said Brian Selinger, who, as the agency’s energy team leader, was involved in developing the Energy Storage Action Plan.
Storage was highlighted in a 2016 state energy plan. State leaders think storage could offer a host of benefits, such as enhancing the productivity of wind and solar, reducing energy costs, enhancing grid reliability, and creating jobs.
The new report suggests tethering a state storage tax credit to a proposed federal tax credit. The Energy Storage Tax Incentive and Deployment Act, introduced in the U.S. House in April, would offer electric storage systems the same 30% investment tax credit now available for solar photovoltaic systems. There is a federal tax credit for storage that meets some specific requirements.
“It’s helpful if we can see that support coming federally first,” Selinger said. “That would send a nice signal. As with solar, then Iowa can say, ‘The federal government has done something; maybe we can layer something on that.’”
Maryland is the only state with a storage tax credit. Several others including New Mexico and Hawaii have discussed it or extended other incentives such as grants, rebates, feed-in tariffs and exemptions from personal property tax, according to James Burwen, vice president of the Energy Storage Association.
Selinger said Iowa officials still need a much better understanding of how storage would work in the state before they would recommend legislation to create the tax credit.
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