July 20, 2021
States Can’t Wait! – A mid-year review of energy storage bills in 2021
In the 2020s – the Storage Decade – energy storage will become a standard, widespread power system resource. Utility resource plans, renewable energy projects, and resilience installations will all rely on storage-driven largely by state energy policies. State legislatures passed 13 significant energy storage bills in the first half of 2021, with most bills falling into three key categories – tax reform, targets, and incentives – with a few not so easily categorized.
|State||Bill||Short Summary||Bill Type|
|Colorado||S 261||Behind-the-meter storage eligible for clean energy incentives||Incentive|
|Oregon||HB 5006||$10M for solar+storage rebate program||Incentive|
|Texas||SB 415||Authorize 100 MW of utility storage procurement||Other|
|Virginia||HB 2148||Permitting reform||Other|
|Connecticut||SB 952||1 GW Target||Target|
|Maine||LD 528||400 MW Target||Target|
|Colorado||S 20||Assess energy storage in the same manner as renewables||Tax Reform|
|Nevada||SB 448||Tax abatement for front-of-the-meter storage hybrids||Tax Reform|
|South Carolina||H 3354||Residential storage sales tax exemption||Tax Reform|
|Indiana||SB 383||Sales tax exemption||Tax Reform|
|Virginia||SB 1201/HB 2006||Property tax exemption/revenue share||Tax Reform|
|Virginia||HB 2201/SB 1207||Local benefits agreements||Tax Reform|
|Arizona||HB 2153||Tax exemption||Tax Reform|
The largest number of bills (seven), dealt with local tax treatment of energy storage. These bills – which dealt with exemptions, standardization, and valuation of energy storage systems – passed in states with very different levels of energy storage market and policy development, passing both in leaders such as Virginia and Nevada, and in states taking a more “wait and see” approach like Indiana and South Carolina. This suggests that no time is too early or late for states to consider reforming energy storage taxes. Read more about the 2021 energy storage tax bills here for an in-depth look at this trend.
Two states, Maine and Connecticut, passed energy storage targets, bringing the total of states with this basic policy in place to nine. Both states established nonbinding targets, rather than requirements, and both contain important elements of ESA’s storage target program design, including interim targets, naming accountable parties, and establishing mechanisms to achieve the targets. The Connecticut bill, SB 952, established interim targets of 300 MW by the end of 2024 and 650 MW by the end of 2027 and required the Department of Energy and Environmental Protection (DEEP) and the Public Utility Regulation Authority (PURA) to report annually on progress to the goal. Maine’s LD 528 set an interim target of 300 MW by 2025 and assigned the Maine Efficiency Trust and state Energy Office various responsibilities for implementing programs and conducting studies to achieve the targets.
Upfront incentives have been important for developing new markets, particularly for behind-the-meter applications. Oregon expanded funding for its residential solar and storage rebate program, and Colorado added energy storage as a qualifying to its long-running renewable incentive program. The Maine and Connecticut targets also included the directives to state agencies to develop incentive programs, and Connecticut is already off to the races with a draft order for an energy storage incentive program. Read more about ESA’s recommendations for behind-the-meter incentives here.
Other Notable Bills
Two other bills, Texas’ SB 415 and Virginia’s HB 2148, don’t fit into categories or trends but address important issues. SB 415 permitted distribution utilities to procure up to 100 MW of energy storage as a resilience measure in response to the catastrophic February grid failure. While 100 MW is not a game-changer for overall installed capacity in the red-hot ERCOT market, this is one of the most significant uses of energy storage as reliability in response to resiliency concerns.
Virginia developed a unique “permit-by-rule” process for approving renewable energy projects over the last decade. HB 2148, previously summarized by ESA here, added energy storage to that process. While Virginia’s specific permit-by-rule process is unique, the practice of extending previously developed renewable energy policy to energy storage is a common strategy.
Storage as a Stand-alone Policy
In years past, major storage legislation has often been attached to larger clean energy bills. For example, Massachusetts, New York, Virginia, and New Jersey each passed their energy storage targets as provisions in larger climate bills. (New York and Massachusetts in initially set energy storage targets through executive branch action – those targets were later codified in omnibus clean energy bills). Both targets passed this year in Connecticut and Maine were bills to deal exclusively or chiefly with energy storage, and 11 of the 13 bills highlighted deal primarily with energy storage. That is not to say that inclusion in broader clean energy packages is a strategy of the past. Tax abatements in Nevada and rebate expansion in Oregon were passed as part of a broader clean energy or budget bill. And we may yet see omnibus clean energy packages this year in Illinois and North Carolina that contain specific storage components.
Still, the shift is notable: storage has grown up enough that it is no longer an afterthought or an add-on to state clean energy strategy – it is state energy policy strategy in its own right. That’s yet another sign that we’re entering the Storage Decade.