Extended renewable energy tax credits were included in a $1.4 trillion federal spending package along with a $900 billion COVID-19 virus relief spending bill. The solar financial investment tax credit (ITC), scheduled to drop from 26% to 22% in 2021, will remain at 26% for two more years. The wind industry likewise got a limited extension of its production tax credit.
This extension suggests that solar jobs in all market sections– residential, commercial, industrial, utility-scale– that begin construction in 2021 and 2022 still can receive a tax credit of 26%. All markets will drop to a 22% tax credit in 2023, and then the residential market will drop to 0%, while the commercial and utility markets will sit at a permanent 10% credit starting in 2024.
According to the Solar Energy Industries Association, “The residential and commercial solar ITC has helped the U.S. solar industry grow by more than 10,000% percent since it was implemented in 2006, with an average annual growth of 50% over the last decade alone.”
You can see the updates for the commercial/utility market beginning on pg. 2439 and the residential solar market starting on pg. 2448 here. (TEXT OF THE HOUSE AMENDMENT TO THE SENATE AMENDMENT TOH.R. 133)
Expanding the ITC has seen help from many outside the market, including congressional leaders and a bipartisan mayor’s group. Many bills have been presented in recent years trying to expand the solar ITC, but absolutely nothing has stuck. While there have been efforts to get an investment credit for energy storage setups, absolutely nothing, including batteries, was incorporated in this spending package.
Abigail Ross Hopper, president and CEO of SEIA, made a statement regarding the new developments, “Over the next few years, we have an opportunity to build a stronger, more reliable, and more equitable American energy economy, and the action Congress is taking today is a helpful down payment.”
Energy storage language was incorporated in the spending and relief package. The Better Energy Storage Technology (BEST) Act licenses $1 billion over five years for federal investments into energy storage R&D.
“In addition to elevating energy storage as a top, cross-functional R&D priority of U.S. Department of Energy, the BEST Act establishes a new competitive grant program for states, utilities, and private companies to deploy energy storage in a variety of applications. This demonstration program advances storage technology innovation and grid operations and sets the foundation for future storage deployments to protect our electric infrastructure against disruption as it enables a zero-carbon energy supply mix. We look forward to working with DOE and Congress to ensure this important program is fully funded and operates effectively”.
“The inclusion of the Better Energy Storage Technology (BEST) Act as part of the year-end spending and relief package is further proof of the bipartisan, bicameral support for energy storage to improve grid reliability and flexibility.”
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