Support for energy storage in Congress is back on the agenda
October 6, 2015
According to Energy Biz, there's reason for optimism in the years ahead. California has led America in the creation of some of the most progressive environmental policies. In a move towards a low carbon future, in 2007, the state legislature passed a bill offering over $2 billion in incentives for the solar power industry. Five years later, the state encouraged further production of technologies for storage of renewable energy.
Other government bodies followed suit. In Washington, there's more attention being paid to the energy storage issue. Currently, in the U.S. Senate, discussion is ongoing about a national energy bill, championed by Ron Wyden (D-Ore.), Charles Schumer (D-New York) and Harry Reid (D-Nevada). The clean energy bill promotes cuts in carbon pollution and aims to create tax credits for clean technologies such as thermal energy storage, batteries and hydroelectric pumped hydro.
According to the bill's section by section summary, the bill creates a "performance-based incentive for increased energy conservation in new commercial buildings and for retrofits of commercial buildings. Buildings reaching minimum conservation thresholds receive a small deduction, which increases for more efficient buildings. Non-taxed entities, including federal, state, local, and tribal governments, and non-profits, are allowed to allocate deductions to the taxpayer primarily responsible for designing the efficiency improvements.
New commercial buildings that are at least 25 percent more efficient than ASHRAE 90.1-2013 standards can receive a $1.00 per square foot tax deduction, which increases with larger efficiency gains, up to a maximum of $4.75 per square foot. Retrofitted commercial buildings can qualify for a $1.25 per square foot deduction for a 20 percent reduction in energy use – greater energy reductions qualify for larger incentives, up to a maximum of $9.25 per square foot.
The energy reduction from retrofits is measured based on third-party modelers who are certified by the Treasury Department and the Department of Energy. The reduction is based on the energy use prior to the retrofits as compared to the energy use modeled after the retrofits are placed in service. Onsite electrical and thermal generation from microturbines, fuel cells, or other distributed generation sources, like rooftop solar panels, along with energy storage, can be taken into account for purposes of calculating energy reduction."
Tax credits for energy storage
Tax credits for energy storage would be a great boost to the industry, however according to Project Finance News, this debate about energy storage tax credits has been ongoing for several years. In 2013, it was proposed that eligible technologies for businesses would get tax credits of 30% of up to $1 million per system.
The good news is that the fight for more energy storage goes on. Attention to energy storage among utility providers has been improving, and if Washington can make it fiscally wiser for companies to invest in energy storage, then business leaders across America will take greater notice. Recently Idaho Power spoke of ice thermal energy storage as a way to meet a projected need for more electricity as more coal plants are retired while balancing reliability, environmental responsibility, efficiency and costs. The Idaho State Journal remarks that the technology creates ice during times of lower power rates and utilizes it during times of higher rates for daytime air-conditioning.
