They may not get it this year, but boosters of energy storage technologies want their sector to get the same tax credits that the federal government extends to the wind and solar industries.
"It would be a good economic investment for us as a government and as a nation to invest in advancing these technologies," said
Matt Roberts, executive director for the industry's trade group, the Energy Storage Association.
Under a bill introduced in the U.S. Senate by Sen.
Martin Heinrich, D-New Mexico, energy storage technologies such as batteries, thermal energy storage and regenerative fuel cells that qualify would get a 30 percent investment tax credit.
The Heinrich bill essentially runs parallel with the 30 percent tax credit that wind and solar receive from the federal government and, like the wind and solar credits, would eventually taper off in the coming years.
Mike Honda, D-California, and Rep.
Tom Reed, R-New York, have introduced a similar but more complicated bill in the U.S. House of Representatives.
The prospect of a getting a tax credit created some buzz among a few of the 2,000 attendees at the Energy Storage North America conference that wrapped up Thursday inSan Diego.
"Storage is too expensive," said
Keith Martin, an attorney at the Washington D.C.-based law firm of Chadbourne & Parke, one of the panelists at the conference. "If the government can help with the cost-sharing, it will then get more people into the market."
Under current rules, energy storage can only receive a federal tax credit if it is paired with wind and solar electricity production, most often seen when a storage component is matched with a rooftop solar system.
The proposed legislation would establish tax credits for stand-alone storage systems.
Extending the tax credit "would encourage deployment of storage throughout our electric power sector," said
Janice Lin, executive director of the California Energy Storage Alliance. "The consequences of that are dramatic for ratepayers."
But in addition to the political hurdles the legislation would have to clear on Capitol Hill, there are other questions.
For example, while wind and solar actually generate energy to the electrical grid, storage -- by definition -- captures energy produced at one time and then deploys it later.
"We're getting to a really tenuous connection," said
William Yeatman, senior fellow specializing in environmental policy and energy markets for the Competitive Enterprise Institute, a free-market think tank based inWashington D.C.
"The subsidy for wind and solar energy is already an indirect subsidy for the energy storage industry," Yeatman said, pointing to the intermittency of wind and solar -- that is, how solar production slumps and when the sun isn't shining and wind power wanes when the breeze isn't blowing.
Deploying energy storage is designed to smooth out those peaks and valleys on the grid.
"It's basically double-dipping," Yeatman said should the energy storage industry receive a taxpayer-funded tax credit. "Those wind and solar subsidies are helping (the energy storage industry) too."
Not surprisingly, energy storage company executives would like to see a federal tax incentive adopted.
"If you had a cost-effective storage credit, it will create certainty in the market and rapid market adaptation," said
Greg Miller, executive vice president of market development and sales at Ice Energy, aSanta Barbara-based company that specializes in thermal energy storage.
California is one of the few states that has incentives in place for the industry.
Energy storage is included in the California Public Utilities Commission's Self-Generation Incentive Program that offers rebates to utility customers who install distributed generation and storage technologies that reduce electrical demand and greenhouse gas emissions.
The state has also established a mandate through the CPUC that requires the state's three investor-owned utilities procure 1,325 megawatts of energy storage by 2020.
Roberts cited a recent study as one reason to back the federal tax credit.
Modeling in Massachusetts estimated that 1.7 gigawatts of advanced energy storage would deliver more than $2.2 billion in system benefits and savings for the Bay State'sratepayers.
"What we're talking about is investing in something that we know has a major financial upside," Roberts said.
But Yeatman said extending the tax credit is wrongheaded and expensive.
"How much is too much and how big is too big with respect to these handouts," Yeatman said. "I would warn any industry that is aggressively seeking a huge subsidy, be careful what you wish for because when the political winds change and a different party's in power and may revoke it, there are dire consequences for your industry."
View all SMART GRID Bulletins click here
Enter your email-id to subscribe to theSMARTGRID Bulletins
14 August 2017
15 August 2017