Testimony Presented To House Economic Matters Committee House Bill 490 An Act Concerning Income Tax Credit – Energy Storage Systems

Posted: February 28, 2017 - 13:37 / Maryland / ESA Filings
Presented By Jason Burwen 
Policy & Advocacy Director, Energy Storage Association
Position: Support
Chair Kaiser, Vice-Chair Turner, and Members of the Committee, thank you for holding this hearing today. I am the Policy & Advocacy Director at the Energy Storage Association. Our nation-wide membership comprises nearly 200 electric utilities, developers, manufacturers, and other companies directly involved in advanced energy storage.  Several of our members conduct energy storage or related business activities in Maryland.
The Energy Storage Association supports House Bill 490 providing a tax credit to Maryland businesses and households that purchase energy storage for reliable power.
In simplest terms, energy storage enables electricity that is generated to be used at a later time, “warehousing” it for when it is most needed—batteries being the most common technology deployed today. By adding this flexibility to the grid, energy storage can reduce peak electricity demand, offset costly infrastructure investments, supply back-up power, integrate variable wind and solar power, and improve the resiliency of the grid.
However, there are still barriers to the widespread deployment of energy storage on the electric grid. Energy storage is unlike any other resource and does not fit existing electric system constructs—sometimes it acts like supply, sometimes it acts like demand, sometimes it acts like infrastructure, and it can switch between these roles at will. That multi-service flexibility is what make storage so valuable. But it’s very different than the technologies utilities and customers are used to. The greatest barrier is a lack of understanding of how to value and plan for energy storage on the electric grid, given that it is a very different technology than what has been on the grid in the past.
Electric grid planning, valuation, interconnection, procurement, and rate design processes should be updated to fully consider energy storage as an alternative to traditional grid solutions. One of the best ways to begin overcoming this barrier is to learn-by-doing. Deploying energy storage systems on the grid will provide opportunities for utilities, regulators, third-party developers, and customers to understand how best to integrate and utilize this new versatile resource. And customer-sited energy storage is particularly relevant to learn from, as households and businesses meeting their own needs can also provide benefits to the rest of the grid. For example, electric customers using energy storage deployments to control their bills or self-consume rooftop solar power would also reduce grid stress during peak periods of demand, both on the system as a whole and on the local circuit or substation.
HB 490 would provide an important jump-start to the emerging energy storage industry in Maryland by providing a tax credit to those individuals and organizations installing residential and commercial energy storage systems. Regulators, utilities, and other electric sector stakeholders will be able to learn from those deployments to update electric grid planning, valuation, interconnection, procurement, and rate design processes accordingly. This in turn will ensure storage is on the menu of options that Maryland regulators and utilities may use to save ratepayers money, increase grid resiliency, and integrate more renewable and distributed resources.
At the same time, HB 490 would provide local energy industry job growth by compelling energy storage companies to prioritize their rapidly growing energy storage deployment efforts in Maryland. HB 490 would ensure continuing clean energy jobs for Maryland residents, since much of the sales and the installation of energy storage devices must occur locally--the same reason why over 5,000 Maryland residents are employed in the solar industry today, according to the Solar Foundation’s 2016 Jobs Census.
Maryland can be a leader among states by adopting this legislation to accelerate the deployment of innovative energy storage systems. HB 490 would spark the energy storage market in Maryland providing individuals with new energy solutions, the electric grid with more dynamic energy resources, and the state with new advanced energy jobs.
ESA supports the tax credit described in HB 490 as a step toward bringing energy storage into the Maryland electric system. I thank you for the opportunity to provide testimony and welcome your questions.