ESA and a broad range of stakeholders support an Investment Tax Credit (ITC) that includes stand-alone energy storage technologies.
The bipartisan, bicameral, Energy Storage Tax Incentive and Deployment Act (S. 1142 & H.R. 2096) offers an ITC for stand-alone energy storage systems. An ITC will offset reductions and delays in market deployments in both the near- and medium-term due to COVID-19, protecting the expanding numbers of Americans employed in energy storage. ESA is advocating that Congress:
- Make energy storage technologies eligible for the ITC under IRC Sec. 48 and 25D, with the option to elect “direct payment.” Since tax equity is likely to become scarce in the near term, due to economic consequences from the COVID-19 pandemic, an ITC should allow businesses to reduce reliance on costly and time-consuming tax equity transactions. The ITC for stand-alone energy storage should either be refundable or allow taxpayers to elect “direct payment” of the credit as tax already paid (as in Sec. 104 of the House Ways & Means GREEN Act discussion draft).
- Allow regulated utilities to opt-out from normalization of a “direct pay” election of the ITC for energy storage. IRC Sec. 50 requires regulated utilities to normalize federal tax benefits over the lifetime of credited energy properties. Regulated utilities should be afforded an opt-out from normalization of any “direct payment” election of the ITC for energy storage, subject to approval by their respective state regulators (see H.R. 5409). Doing so can increase annual deployments of energy storage on the grid by an additional 10 percent.
See more resources and letters of support for passing a #StorageITC to support economic recovery from COVID-19:
- “Impacts of COVID-19 on the Energy Storage Industry” (2-page PDF)
- Results from ESA’s April 10 Industry Survey
- ESA’s March 19 Memo on Short-Run Economic Stimulus Options for Congress
Voices of support for an ITC for stand-alone energy storage:
- Sen. Gardner (R-CO), Sen. Collins (R-ME), & Sen. Heinrich (D-NM) July 2019 letter to Congressional leadership >>
- Joint clean energy industries April 2019 letter of support >>
- California state legislators Aug 2019 letter to Speaker Pelosi >>
- Massachusetts state legislators Sep 2019 letter to House Ways & Means Chair Neal >>
- Northeastern clean energy industries June 2019 letter of support >>
- National environmental organizations April 2019 letter of support >>
- Senate Democrats March 2019 letter to Minority Leader Schumer >>
- Letters of support in the Senate Finance Energy Task Force Aug 2019 report >>
- Joint faith-based organizations’ September 2019 letter of support
- Letter from local and state officials nationwide in support of clean energy tax incentives