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Quick Take: We've all seen how tax credits boosted investment in wind power. Will the same concept work for energy storage? Both chambers of the U.S. Congress have introduced bipartisan bills to allow investment tax credits for virtually any kind of energy storage project.
On the plus side, tax credits could help make energy storage more affordable. On the other hand, tax credits distort the market. They convince people to invest in technologies that don't cost out on their own. Suppliers rush in. Then, when the credits expire, the bubble bursts and the industry is often worse off than before.
Do the pros outweigh the cons? Use the Comment form at the bottom to share your opinion. - By Jesse Berst
Energy storage industry gets bipartisan support from Senate
The Electricity Storage Association (ESA) applauded today the reintroduction of energy storage legislation by U.S. Senators Ron Wyden (D-OR), Susan Collins (R-ME), Jeff Merkley (D-OR), and Angus King (I-ME) that would create an investment tax credit (ITC) for energy storage technologies of all types and help level the playing field for an industry that has enormous potential to increase the reliability, security, and efficiency of the nation’s electric grid. The Storage Technology for Renewable and Green Energy Act (STORAGE) Act was originally introduced in the 112th Congress in both chambers with bipartisan support. It closely mirrors the bill recently introduced in the House, H.R. 1465.
“We are delighted that Sen. Ron Wyden, chairman of Senate Energy and Natural Resources and a longtime supporter of energy storage, and senators Collins, Merkley and King, all staunch supporters of clean energy technologies, understand the value of energy security and have taken such a strong interest in energy storage,” said Brad Roberts, Executive Director of the ESA. “Energy storage technologies help all resources – whether renewable or traditional – run more smoothly. Our applications are now operating on the grid and have proven to be of enormous benefit; this tax credit will help developers secure private sector equity and debt financing to truly scale this industry.”
“It is to their credit that these policymakers worked together to craft a bipartisan bill that is limited in size and scope yet has the potential to open up the market for so many American innovators,” said Katherine Hamilton, Policy Director of the ESA Advocacy Council. “The ESA has received such positive feedback from both sides of the aisle for energy storage – it just makes sense – and an investment tax credit to draw increased investment in these U.S. companies is smart public policy.”
One of the provisions of this bill will enable third party financing of rooftop solar and energy storage, a combination that can increase the ability to use solar resources when the sun is not shining. “This new provision would increase the value of rooftop solar systems, enhancing the reliability of our electric grid while reducing customer cost,” continued Hamilton.
The energy storage industry strongly believes that advanced energy storage technologies have the potential to revolutionize the electric grid – from a system that has to use electricity at the moment it is generated to a system that can store that energy and use it when it is needed most.
About ESA: The Electricity Storage Association, originally founded in 1991, is an international trade association established to promote the development and commercialization of competitive and reliable energy storage systems. The Association brings together electric utilities, system operators, regulators, policy makers and electricity providers to discuss the challenges facing energy storage and develop the most appropriate solutions. With hundreds of members from across the world, ESA is committed to bringing a resilient, efficient, clean and cost-effective energy storage system to modernize our grid. For more information about the Electricity Storage Association, go to www.electricitystorage.org