Battery and other energy storage companies are seeing their best shot in years at getting an investment tax credit that would kick their industry and renewable energy into higher gear.
The Democratic-controlled House is considering the idea as it looks at how to take action on climate change.
And in the Republican-controlled Senate, there’s a new campaign afoot for an energy storage investment tax credit, led by Sens. Cory Gardner (R-Colo.) and Martin Heinrich (D-N.M.).
Lawmakers who support the credits say they’re needed because while battery prices have declined, battery storage still hasn’t been deployed to a significant degree.
The energy storage industry believes the new investment tax credit should cover not just batteries but also other storage technologies—such as pumped hydropower, more efficient flywheels, and technology that converts electrical energy into high-pressure compressed air, which can be stored for later use. That’s according to Jason Burwen, the vice president of policy at the Energy Storage Association. The group supports a 30 percent credit, the same as solar energy has now.
Energy Storage Association members include utilities such as Southern California Edison Co., Duke Energy Corp., and Entergy Corp. and battery energy companies such as Con Edison Battery Storage.
Some Senate Republicans told Bloomberg Environment they’re receptive to the idea of battery incentives, including Sen. John Thune (R-S.D.), the chamber’s second-ranking Republican, whose state is dotted with wind turbines. Bulk storage could help the electric grid run on renewable power when intermittent sources like wind and solar aren’t available.
“Once we can store battery energy, then a lot of these energy sources become way more affordable, and workable—wind being one,” Thune said.
“There’s a lot of potential there,” said Sen. Lamar Alexander (R-Tenn.), chairman of the Appropriations Subcommittee on Energy and Water Development. He predicts prices of lithium-ion batteries will fall 45 percent over the next five years, led by electric vehicle manufacturers.
“These companies that are applying the technologies are devoting huge amounts of money to it. I mean, every major automobile maker is trying to build electric cars,” Alexander said.
Heinrich and Gardner introduced their Energy Storage Tax Incentive and Deployment Act (S. 1142) April 11. It would provide an investment tax credit starting at 30 percent for business and residential use of all energy storage technologies.
There is already a little-used investment tax credit available for energy storage installed in conjunction with solar systems, but no parallel credit for stand-alone energy storage or storage linked to wind projects.
The Senate energy storage tax credit would gradually decline until reaching a 10 percent permanent credit for commercial solar systems beginning in 2022.
Seeking Senate Support
Gardner, generally viewed as the most vulnerable Senate Republican up for election in 2020, said in an interivew that his biggest priority is building support for the measure, particularly among Republican colleagues.
“Energy storage can help grid operators shift wind and solar energy to when it’s most needed, allowing us to increase the amount of renewables in our energy mix,” Gardner said in a statement about the bill.
Renewables, including hydropower, account for 17 percent of U.S. electricity production. Of that 1.6 percent is solar and 6.6 percent is wind.
Tennessee’s Alexander is an early adopter for battery technologies. He bought the first generation of the all-electric Nissan Leaf in 2011, when he said it “could barely get to Dulles Airport and back” from nearby Washington.
The new Nissan Leaf is 235 miles of estimated range on a charge, Alexander said. He said the game-changer for energy storage will come when batteries have enough capacity to help a utility or customer store energy.
“We’re a good ways from that,” he added, “but that kind of research is an important part of having cheap energy and clean energy and then eventually dealing with climate change in other parts of the world.”
Competing House Bills
House Democrats have their own storage proposals, including a three-bill package introduced in March by Rep. Mark Takano (D-Calif), a backer of the Green New Deal who co-chairs a bipartisan caucus on advanced energy storage.
Takano, along with New York Republican Rep. Chris Collins, introduced the Storage Technology for Operational Readiness and Generating Energy Act (STORAGE Act) (H.R. 1744); the Battery Storage Innovation Act (H.R. 1742); and the Advancing Grid Storage Act (H.R. 1743).
The bills would amend the Public Utility Regulatory Policies Act of 1978 by adding energy storage to options states should consider when crafting their energy plans.
It would also ensure the Energy Department’s Innovative Technology Loan Guarantee program could fund battery storage projects and authorize a $50 million energy storage research program within Energy’s Office of Electricity, expanding research already supported by the department.
Pennsylvania Democratic Rep. Mike Doyle introduced legislation April 4 (H.R. 2096) to extend the existing investment tax credit to battery energy storage, as does Heinrich’s bill.
American Council on Renewable Energy President and CEO Gregory Wetstone said the stars may be aligning for advancing the bill in a divided Congress.
“Battery storage and the investment credit are on the very short list of things that, while not a slam dunk, have a realistic chance of being enacted in this Congress,” he told Bloomberg Environment.
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