U.S. politicians are making another attempt to introduce a tax credit for investments in batteries and other energy storage systems, and may extend the life of existing solar and wind credits, thanks in part to new momentum created by the Green New Deal resolution introduced earlier this year by Rep. Alexandria Ocasio-Cortez (D-NY) and Sen. Ed Markey (D-MA).
The Energy Storage Tax Incentive and Deployment Act, tabled last week by Rep. Mike Doyle (D-PA), would extend a 30% investment tax credit to batteries and other electricity storage systems. Greentech Media says a version of the bill was first introduced by Sen. Martin Heinrich (D-NM) in 2016.
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“This year’s House version would grant full ITC [Investment Tax Credit] eligibility to investments in commercial, residential, and utility-scale energy storage, with the same ramp-down now set for solar—30% through 2019, 26% in 2020, and 22% in 2021,” Greentech explains, citing analysis by the Union of Concerned Scientists. “For residential energy storage, the ITC for storage would be zeroed out after 2021. But it would remain at 10% permanently for commercial and utility-scale projects.
Representatives of the U.S. storage industry have “long been clamouring for their own federal tax credits, but have found little purchase in a politically fractured Congress,” Greentech notes. “It’s unclear whether this year’s version will be taken up as part of a broader push for a Green New Deal and other climate and environmental legislation among House Democrats, or how those efforts will fare in a Republican-controlled Senate. “
Gregory Jenner, a partner at Stoel Rives and former acting assistant secretary for tax policy at the U.S. Treasury Department, said the bill may ultimately serve as a placeholder until after the 2020 federal election. “There is considerable uncertainty (and an absence of consensus) about tax legislation in the 116th Congress,” he said Friday. “The 2020 presidential election casts a shadow over everything Congress does,” making new tax legislation unlikely.
