At a time of nearly unprecedented legislative gridlock on Capitol Hill, there are too few policies that have the bipartisan support and national importance necessary to move through Congress. But one of those policies has received the backing of key congressional constituencies and could revolutionize the energy grid as we know it.
Businesses, citizens and policymakers across the country are taking note of the benefits of energy storage. Whether using solar, wind or gas, storage allows energy companies to provide electricity more reliably and efficiently to their customers. By storing the electricity that’s generated and saved until it’s needed, investors in this technology can optimize grid operations, lower costs for consumers and help keep the lights on during mass blackouts.
A simple change in federal policy could open up an entirely new growth industry for the advanced energy economy. Congress needs to provide storage with the same policy certainty it previously provided to solar, wind and other emerging technologies.
Today, energy storage is only eligible for the investment tax credit when paired with certain solar energy projects. Proposals to correct this gap have previously failed to clear Congress.
This commonsense policy has the backing of both Democrats and Republicans in the House and Senate. Former Department of Energy Secretary Rick Perry has called storage “the holy grail” for energy policy. Federal Energy Regulatory Commission Chairman Neil Chatterjee has called energy storage “a game-changer.”
Bipartisan legislation has been introduced in both chambers of Congress to fix this “glitch” in tax law and allow energy storage to qualify for the ITC as a stand-alone technology. As congressional tax writers negotiate a tax extenders package, energy storage should be a no-brainer for inclusion in a final deal based on its broad support and ability to enhance the energy grid.
Storage is already demonstrating early-stage capability to transition the United States to a more resilient, efficient, sustainable and affordable electricity grid. But Congress is running out of time this year to further support energy storage and ensure the United States remains a leader in the advanced energy economy.
Expanding the ITC to cover stand-alone energy storage would grow jobs and energy investments substantially. The data backs this up.
According to Wood Mackenzie, expanding the existing ITC to include all energy storage projects would increase the market upside by 16 percent. This could be a real game-changer in an industry that the U.S. Energy Storage Association projects could support more than 150,000 jobs in research and development, construction, manufacturing and other sectors.
The storage ITC provision is an easy fix. With hindsight, lawmakers likely would have included energy storage in previous energy tax packages, but even a few years ago, they couldn’t have anticipated the exciting new developments that would hit the market. It’s essentially a cost-effective change that would clarify the intention of the ITC in the first place.
Even in these times, there are opportunities for both parties in Congress to come together and show us they can put the American people first. By reaching across the aisle and supporting energy storage, federal policymakers can deliver a substantial policy win with huge potential to move us toward the modern electric grid we all want and that consumers now demand.
Heather Reams is the executive director of Citizens for Responsible Energy Solutions. Kelly Speakes-Backman is the CEO of the U.S. Energy Storage Association.