Washington, D.C. - Colorado U.S. Senator Michael Bennet this week introduced the bipartisan Energy Storage Tax Incentive and Deployment Act of 2017 to establish an investment tax credit (ITC) for business and home use of energy storage.
"Colorado is helping lead the nation's shift to a clean energy economy, which includes investing in innovative energy storage technologies," Bennet said. "The proposed tax incentives will continue to drive investment to our state, making energy storage more affordable and accessible for homes and businesses. This will ultimately create jobs, lower monthly electricity bills, and construct a more reliable and secure electricity system for Colorado."
Bennet has consistently supported investments in clean energy, cosponsoring legislation to reduce carbon pollution through incentives for clean energy technology, help finance carbon capture and storage projects, and establish new goals for the Department of Energy related to energy storage.
Energy storage complements intermittent renewable resources-such as wind and solar-to increase full-time availability, provide backup power in case of emergencies, and help reduce the need for high-cost power during periods of peak demand, such as during the coldest mornings or hottest afternoons. According to a recent U.S. Department of Energy study, there are about 25,000 megawatts of installed energy storage in the United States.
The proposed tax incentives are modeled on the current ITC for solar energy and apply to either large, grid-connected energy storage systems or to smaller battery systems for residential power. Home battery storage, coupled with a small wind or rooftop solar system, could be used to store energy during the day for use later in the day or during overcast skies and to help consumers reduce their energy bills.
Highlights of the Energy Storage Tax Incentive and Deployment Act:
- Business Energy Investment Credit for Energy Storage - For commercial applications, the bill provides the same tax incentive as currently available for solar energy in section 48 of the Internal Revenue code. All energy storage technologies would qualify, including batteries, flywheels, pumped hydro, thermal energy, compressed air, etc. To qualify for the ITC, the system must have a storage capacity of at least 5 kilowatt-hours. The credit allowed is the same as currently available for solar energy, including the phase down. The IRS currently allows an ITC for energy storage when it is installed in conjunction with a solar energy system. The bill would extend the ITC for any energy storage project in all applications, including consumer-owned, grid-connected, or off-grid.
- Residential Energy Property Tax Credit for Energy Storage - For residential applications, the bill provides homeowners the same credit as currently available for solar energy in section 25D. However, only battery storage is eligible for the residential ITC, and the system must have a storage capacity of at least 3 kilowatt-hours.
Click HERE for a copy of the bill.