Storage Act to provide 20% investment tax credit of up to US$40M for storage systems connected to U.S. electric grid, 30% investment tax credit of up to US$1M to businesses, homeowners for on-site storage projects, bill sponsors say
November 11, 2011
– As the nation takes steps to improve energy efficiency and develop renewable resource technologies, not enough is being done to ensure that electricity infrastructure is being used efficiently. The focus on building transmission and generation capacity to meet peak demand for electricity means that consumers pay more while producers are forced to rely on less cost-efficient energy sources.
U.S. Senators Ron Wyden (D-Ore.), Susan Collins (R-Maine) and Senate Energy Committee Chairman Jeff Bingaman introduced the Storage Technology for Renewable and Green Energy Act of 2011 (STORAGE) to jump start the development of energy storage technology to better manage capacity to meet peak energy needs and make it possible for intermittent energy sources like wind and solar power to reach their potential.
As the percentage of energy from wind and solar increases, the energy grid must also adjust to the intermittent nature of these technologies. Renewable generation capability changes with the weather and the time of day and not necessarily when power is most needed. Advancements in energy storage technologies will provide more efficient management of peak energy needs while simultaneously promoting the growth of clean, renewable energy technologies.
"The missing piece of the renewable energy debate has always been how to make those technologies reliable when the sun doesn't shine or the wind doesn't blow," Wyden said. "Technologies that not only store energy to cover for intermittent output but also make the existing grid more efficient could be the very thing renewable energy technologies need to break through to the mainstream."
"Deployment of storage technologies will make our nation's electricity grid more reliable while also enabling more efficient use of existing energy sources as well as new ones, such as wind and solar," said Bingaman. "These technologies have the potential to cut electricity bills, reduce peak power demand and lower greenhouse gas emissions. The incentives in this bill also will make storage technologies more affordable for businesses and homes."
"Storage systems comprise a broad range of technologies and can be used in a variety of ways," said Senator Collins. "The STORAGE Act would help advance energy storage technologies to improve the efficiency of the nation's electricity grid, and energy storage for industrial, commercial, and residential establishments, while helping to promote wider use of clean, renewable energy."
According to the Electric Power Research Institute, more than 25 percent of the equipment and capacity of the U.S. electric distribution system and 10 percent of transmission equipment are needed to meet the demands of less than 400 hours of peak electricity use each year. The only resources currently agile enough to meet that demand are fossil fuels. The STORAGE Act offers business incentives for the development of technologies that can better store energy created during non-peak hours and distribute it to meet peak demand. This will make the grid more efficient than it is now, reduce reliance on burning fossil fuels and minimize a barrier preventing intermittent energy sources like solar and wind from breaking through into the mainstream.
The STORAGE Act provides a 20 percent investment tax credit of up to $40 million for storage systems that are connected to the electric grid and a 30 percent investment tax credit of up to $1 million to businesses and homeowners for on-site storage projects. It provides tax credits to businesses and homeowners who install energy storage on their own property to help serve their own energy needs efficiently or capture energy from on-site renewable energy generation. The bill does not pick "winners and losers" and allows the market to decide which technologies are the best and not specifically singling out any one resource.