Over 50 California Companies Send Letter to Congress Urging Investment Tax Credit for Storage

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The California Energy Storage Alliance (CESA) sent a letter to Congress urging inclusion of the investment tax credit (ITC) for storage in upcoming infrastructure packages.

Over fifty California-based energy storage companies signed the letter, citing that enacting a storage ITC would provide Californians a “more resilient, reliable, and cost-effective electric system.” The letter was sent just as California and other states like Texas and Arizona are anticipating a heat-wave and red flag warnings that will directly impact electric grids and power availability. The letter cites reliability issues, considering both system-wide emergencies and local public safety power shutoffs.

Energy storage enhances the capability of existing wires infrastructure to host electric vehicles, distributed generation, and other 21st century demands on the power system.

“As you consider clean energy and infrastructure legislation, we urge you to support an Investment Tax Credit (“ITC”) for energy storage technologies,” wrote CESA and the companies in the letter. “Enacting a storage ITC this year is critical to ensure a level playing field for energy storage to compete with all other energy resources made eligible for the ITC (such as solar, microturbines, and fuel cells), while also enabling the grid enhancements that energy storage can provide. Energy storage helps generation resources become more efficient, productive, and competitive.”

We cannot rely on yesterday’s infrastructure to deal with tomorrow’s climate. An ITC for storage is essential to achieving our country’s decarbonization goals and enable communities like those in California to be resilient to increasing disruptions from extreme weather.

The letter stated, “Storage solutions are increasingly helping California customers manage their energy bills while also providing backup power during the recent, more frequent outages. Storage also supports our state and national clean energy and greenhouse gas emission reduction goals by absorbing and later discharging energy from renewables, providing critical balancing for the grid. Storage does this when configured to ‘stand-alone’ or when ‘co-located’ with renewable power sources.” The letter continues, As renewables come online, storage supports grid needs such as ramping and voltage support and reduces the need to rely on high emission power sources.”

Modernizing our electric infrastructure with energy storage also spurs clean energy job growth across the country. The letter stated projections for California, including: “CESA estimates that energy storage development created over 18,000 jobs in California between 2010-2020. With significant construction and other development activities occurring this year, CESA expects this number has already grown significantly and will continue to grow to over 98,000 jobs in California by 2030.”

ADDITIONAL BACKGROUND
During the first quarter of 2021, momentum for the ITC for storage has grown. In March, President Biden released his American Jobs Plan, which called for the ITC for energy storage. The subsequent Made in America Tax Plan by the Treasury Department also included the ITC for storage, examining its role in increasing reliability of clean energy supply. More than 150 organizations sent a letter to U.S. House and Senate leaders requesting they include bipartisan legislation to make standalone storage projects eligible for the ITC in the upcoming infrastructure bill. 

Sen. Martin Heinrich (D-NM), Sen. Susan Collins (R-ME), Rep. Earl Blumenauer (D-OR), Rep. Mike Doyle (D-PA) and Rep. Vern Buchanan (R-FL) have introduced the bipartisan Energy Storage Tax Incentive and Deployment Act(S. 627 / H.R. 1684) to remove limits on applying the investment tax credit to storage technologies only when integrated with ITC-eligible solar projects. This legislation is mirrored in the GREEN Act (H.R. 848) introduced in February by House Ways & Means Chairman Rep. Mike Thompson (D-CA) and in the Clean Energy for America Act (S. 1288) introduced by Senate Finance Chairman Ron Wyden (D-OR) in April, both of which include making storage technologies eligible for the ITC with an option to elect direct payment of the credit. 

As outlined in ESA’s 2030 Vision, at least 100 GW of new energy storage is needed to drive the clean energy transition and transform the electric system to handle 21st century demands. The United States has deployed over 3 GW of battery and other advanced energy storage to date.

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