Battery Boosters Pushing Congress to Give Industry a Tax Credit

Renewable-energy advocates are pushing Congress to create a tax credit for power-storage systems, a move that may help unlock new opportunities for wind and solar nationwide.

A storage tax credit would boost the grid’s resiliency and reliability, they say, key buzzwords in the Trump administration’s campaign to save struggling nuclear and coal-fired power plants. But so far, congressional Republicans aren’t biting.

The House of Representatives’ initial draft of legislation announced this week would extend a slew of expired tax breaks, but doesn’t mention energy storage despite a lobbying effort from renewables groups including the Energy Storage Association and the Solar Energy Industries Association.

“There has been bipartisan support for batteries,” said Cheryl Wilson, a Washington-based analyst at Bloomberg Intelligence. “But this tax credit is a bit more challenging because they’re not looking for a simple extension. They’re looking for more policy making.”

The industry’s push comes as advanced energy-storage technologies are starting to go mainstream. Battery costs have plunged, thanks to electric-vehicle demand, making them viable as standalone entities or alongside solar and wind farms that otherwise are unable to provide electricity around the clock.

Tax Credit

Boosters are seeking to broaden the federal investment tax credit, which helped nurture solar from electrical upstart to stalwart, so that it includes storage. Today, storage may qualify for the tax credit if such units are charged at least 75 percent by solar.

Older storage technologies are widely used, notably hydroelectric dams that can release water from vast reservoirs when needed. And some pumped hydro installations also have the ability to move water uphill when there’s surplus power so it can be released later when there’s more demand. But these systems are limited by geography, and developers are seeking ways to retain electricity produced anywhere.

Allowing batteries to qualify for a tax credit could accelerate the deployment of renewables and erase a problem that’s flummoxed some of the sunniest states: too much solar power during the day, and not enough at night.

“Everyone understands the transformative nature of storage,” Abigail Ross Hopper, president of the Solar Energy Industries Association, said in an interview. “It’s about the rate and speed at which customers can get this product.”

Battery Growth

The U.S. will add 500 megawatts of battery storage this year if all expected projects come online, doubling last year’s installations, said Yayoi Sekine, a New York-based analyst at Bloomberg NEF.

Cognizant that Congress may not act on the credit before year-end, backers of the credit are already positioning for action next year. “We’re not going to let this go,” said Kelly Speakes-Backman, chief executive officer of the Energy Storage Association.

They’re hoping to find an ally in Chuck Grassley. The Iowa Republican senator has long been a big backer of wind power and played a key role 26 years ago in the production tax credit that has since propelled the installation of wind turbines across the U.S. Now, as the incoming chairman of the Senate Finance Committee, Grassley could help advance an energy storage credit aimed at helping unlock more wind power potential.

“If we can get storage, it’ll solve a lot of problems because you’ll be able to generate electricity when people aren’t using it right off the line and store it,” Grassley said in a conference call with reporters. “If we can make wind power more successful than it already is through storage, I would look kindly at that.”