We Are the National Electrical Contractors Association

The Voice of the Electrical Construction Industry. Learn More
Welcome back,

NECA Hails Introduction of Bill Designed to Create Tax Credit for Energy Storage

Jul 15, 2016

The National Electrical Contractors Association on Friday praised S. 3159, the Energy Storage Tax Incentive and Deployment Act, a bipartisan bill introduced by Sen. Martin Heinrich (D-N.M.) designed to establish investment tax credits (ITCs) for business and home use of energy storage.

The bill is cosponsored by Sens. Dean Heller (R-Nev.), Brian Schatz (D-Hawaii), Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Angus King (I-Maine), Jack Reed (D-R.I.) and Mazie K. Hirono (D-Hawaii).

The proposed tax incentives are modeled on the current ITCs 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 roof-top 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.

Marco A. Giamberardino, NECA’s Executive Director of Government Affairs, said energy storage is an important component of the work done on both the utility and customer sides of the service point and it is performed routinely by qualified electrical contractors and electricians nationwide.

“Senators Heinrich, Heller, and Schatz's legislation will go a long way to ensure the tax code will recognize and incentivize energy storage technology for what it is – a critical part of an integrated approach to modernizing the nation's electric grid,” Giamberardino added. “These additional incentives will help usher a national transformation to a smarter and more reliable power grid. NECA thanks Senator Heinrich for his leadership on this important issue.”

View Energy Storage Tax Incentive and Deployment Act


Some other 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 IRS 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 a limited ITC for energy storage when it is installed in conjunction with a solar or wind 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.

“This bipartisan bill will ensure federal policy supports the integration of emerging storage technologies into our nation's energy grid,” Heinrich said. “Grid-scale energy storage will bolster system resilience during emergencies and outages, provide reliable supplemental services to the grid, and displace new investment in expensive substations and transmission lines.”