Page 25 - ESJ – ENERGY STORAGE JOURNAL

COVER STORY: US STATES TO WATCH

FIX THE ITC SO AMERICAN ENERGY INNOVATORS CAN THRIVE

By Carl Mansfield — senior vice president, oversees
NantEnery’s SmartStorage intelligent energy management
products and services for commercial and industrial
customers. He founded Sharp Electronics Corporation’s
Energy Systems and Services Group and served as
its general manager, focusing on developing energy
management and energy storage products for the US market.

s the US works to modernize paired with ITC-eligible resources. help these new technologies gain a
its aging electric grid for Congress has a ready opportunity foothold that might otherwise be hard
Areliability, and to meet to correct this oversight through to achieve. This can help technology
aggressive environmental protection the Energy Storage Tax Incentive innovators thrive and grow in the
goals, energy storage has become and Deployment Act, bipartisan face of intense competition from
an essential component in the legislation introduced in both the overseas giants. As such, the ITC
process. Increased deployment House (H.R. 4649) and the Senate is a worthwhile investment in US
of storage, particularly advanced (S. 1868). Passage of this legislation innovation and competitiveness and
battery technology, will enable us to would ensure the tax credit applies to will provide substantial benefits to
capture and effectively use increasing energy storage explicitly by making American business and residential
amounts of intermittent renewable it an ITC-eligible resource in its own customers.
energy sources, as well as create a right, so that it can compete fairly with We fully agree with Secretary of
wealth of distributed power sources all the other energy resources that Energy Rick Perry when he said in
that will make the grid more resilient. enjoy favorable ITC treatment. February that battery storage is “the
The technology used in the latest Extending the ITC to storage would holy grail of this whole renewable-
storage systems has advanced benefit our industry in many ways. It energy quest.” Storage will transform
almost as fast as the cost has would create greater opportunities the American electrical system into a
diminished, and it stands poised to to obtain financing, for companies 21st century global leader in the use
improve both our nation’s electric in both the storage and renewable of sustainable, renewable, and
grid and our economy as a whole. energy businesses. That capital would cost-effective energy. By passing the
Yet storage isn’t deployed nearly allow the market to scale more easily Energy Storage Tax Incentive and
as widely as it should be — in large and accelerate both new technologies Deployment Act, Congress can
part because of a major deficiency and cost reductions in products, as acknowledge the importance of this
in the federal Investment Tax Credit well as create more jobs, including industry to the American economy,
that needs to be fixed by congress high-quality manufacturing jobs. our global competitiveness, and to
in order to keep our nation’s It would also help the nation’s ensuring our nation’s grid remains the
infrastructure and our nation’s storage economy on a much larger scale by best in the world.
industry on the cutting edge. accelerating deployments of energy
The ITC currently applies to a storage systems at large commercial
wealth of energy resources, including and industrial operations, which can
renewables like solar power, that both reduce rapidly escalating utility
require storage technology to reach bills and prevent economic loss
their full potential. What’s more, during grid outages. Energy storage
congress has already extended the allows these companies to either
ITC for those technologies through generate their own power with solar
2022 in an effort to continue providing or wind and tap it when needed, or to
a vital incentive to the entire energy purchase power from the grid when
sector. prices are lowest and use it during
Unfortunately, neither the prior peak periods when demand charges
version of the ITC nor the extension are highest. The substantial savings
addressed energy storage with in demand charges frees up capital
sufficient clarity, despite the major those companies can put into job
role it will play in grid modernization. growth and innovation.
Without clear statutory rules, the Extending the ITC to storage
industry operates in a state of is also important for American
uncertainty because of a lack of competitiveness in the global energy
unambiguous IRS guidance about the storage market. Many new and highly
eligibility of energy storage equipment promising battery technologies are
for Section 48 & 25D tax credits when emerging in the US and the ITC will

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