Tax attorney Greg Jenner and energy development attorney Morten Lund were quoted in Solar Power World in an article titled “The U.S. needs a storage ITC to reach carbon-free electricity goals,” published April 16, 2021. The article discusses some of the obstacles in the way of greater adoption of energy storage, which when coupled with solar power or other renewable sources of energy would help the U.S. reach its carbon-free electricity goals to combat climate change.
The lack of a federal tax credit solely for energy storage has been a deterrent to its deployment. Currently, to be eligible for the Investment Tax Credit (ITC), storage must be paired with solar and for five years charged at least 75% directly from that energy source.
“[Batteries] can do 100 different things, but if you can only charge from the solar system, you can only do really two or three or even just one. They basically become time-delay equipment and nothing else,” Lund said. “If you unbundle them, now you’re free to do full grid-support services from your battery, while also providing that time-shift service for the solar system.”
Members of the renewable energy industry say an ITC for storage would expand storage development opportunities, whether in conjunction with solar or not. And though bipartisan standalone energy storage tax credit bills have been introduced in both the House and Senate, and President Biden’s infrastructure bill hints at such a credit, uncertainty as to the legislation’s passage leaves developers in limbo.
“It will be great once they get it done,” Jenner said. “In the meantime, it’s making everybody’s life difficult because nobody can plan.”