US Bill brings ITC to energy storage

LinkedIn
Twitter
Reddit
Facebook
Email

Previous rules only allowed a limited ITC for energy storage when installed alongside wind or solar. Credit: Southern California Edison
US senators have introduced a new Bill for energy storage that brings in investment tax credits (ITC) for both grid-scale and residential energy storage systems.

The ‘Energy Storage Tax Incentive and Deployment Act’, a bipartisan bill co-sponsored by seven senators and introduced in Congress in late May, uses the current ITC for solar energy as its model in a bid to open up competitive storage markets.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

For commercial applications of storage, under the new Bill, all energy storage technologies including batteries, flywheels, pumped hydro, thermal energy, compressed air, among others qualify for the ITC, but the system must have a storage capacity of at least 5kWh.

Previous rules only allowed a limited ITC for energy storage when installed alongside wind or solar, but the bill extends the ITC for all applications of storage including consumer-owned and on or off-grid.

For residential applications of storage, the new bill only brings the ITC to battery storage specifically and eligible systems must have at least 3kWh capacity.

Matt Roberts, executive director of the Energy Storage Association, said: "Extending the ITC to energy storage is critical to accelerate transition to a flexible, efficient and resilient US electric grid. This legislation demonstrates there is bipartisan agreement that reducing tax burdens on innovators and opening new opportunities for utilities, businesses and households to invest in intelligent energy systems is an effective way to modernize our energy infrastructure and create a cleaner, more reliable electric grid."

Cross-senate support

The bill garnered support from figures on both Democrat and Republican sides of the Senate.

Senator Martin Heinrich added: "This bipartisan bill will ensure federal policy supports the integration of emerging storage technologies into the our nation's energy grid. 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.

“As generation and storage technologies improve and become less expensive in the coming years, economics will drive new electrical generation consistently in the direction of clean, pollution-free power.”

Senator Angus King said: “This ITC will play an important role in encouraging storage innovation, supporting the growth of the industry, and helping businesses and consumers alike as they take their energy future into their own hands by investing in renewable power.” 

Last year, King and Heinrich also introduced legislation to set national targets for energy storage. King also introduced the Free Market Energy Act in order to establish a set of parameters for the governance of distributed energy resources, like storage, solar, and wind.

Read Next

Premium
May 21, 2025
ESN Premium speaks with Dr. Yinghuang Ji, head of structuring at MN8 Energy, on current challenges and opportunities for growth in the energy storage market.
May 16, 2025
In a contrasting double-header of news for the US energy storage ecosystem, Our Next Energy (ONE) has launched US-made cells, modules and BMS while BESS manufacturer American Energy Storage Innovations (AESI) is winding down its business.
May 15, 2025
The Republicans’ budget reconciliation bill is starting to take shape, and US clean energy industry figureheads have sounded the alarm at its initial proposals to roll back the IRA’s measures and restrict foreign technologies.
May 9, 2025
The Illinois Commerce Commission (ICC) staff has announced recommendations for the state’s first energy storage procurement.
Premium
May 8, 2025
Swift Current Energy has encountered a major stumbling block in developing a standalone BESS in Virginia.

Most Popular

Email Newsletter