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Proposed Bipartisan Legislation Would Expand Investment Tax Credit to Standalone Energy Storage Projects

A bipartisan group of federal lawmakers recently introduced a bill aimed at jumpstarting growth in the energy storage sector.  If enacted, the Energy Storage Tax Incentive and Deployment Act of 2021 would broaden the investment tax credit program, which is widely credited with stimulating considerable growth in the solar sector, to include standalone energy storage projects.  The tax credit is currently only available for energy storage projects that are charged directly from other clean energy projects that qualify for the credit, such as solar.  In contrast, the proposed legislation would revise the investment tax credit so that it covers residential battery systems as well as large commercial and utility-scale storage projects, including batteries, pumped hydropower, hydrogen storage, thermal energy storage, and regenerative fuel cells, regardless of whether they are coupled with a qualifying solar project.  Expanding the credit to standalone projects is intended to drive investment to storage projects with greater charging flexibility, potentially allowing storage systems to access a larger piece of the energy market. The large-scale deployment of domestic energy storage systems is largely viewed as critical to the continued growth of the renewables sector, as well as a key component of achieving the nation’s energy reliability and resiliency goals.  While it may be unrealistic to expect that extension of the tax credit to energy storage projects would result in the stratospheric levels of growth enjoyed by the solar industry over the past decade, the tax credit’s proven track record for stimulating renewables development has energy storage advocates hopeful that the proposed legislation would drive significant investment in the sector, resulting in a meaningful increase in energy storage deployment.

Tagged:  Energy Storage Tax Incentive and Deployment Act of 2021, energy storage, tax credits

U.S. Department of Energy Funding Flow Battery R&D

The Department of Energy (DOE) recently announced that it will be awarding up to $20Million to support research and development of emerging flow battery storage technology.  The DOE’s announcement can be found here.  Battery storage has been identified by the DOE as an integral piece of the puzzle to modernizing our grid and enabling the deployment of additional renewable energy resources.  Regarding flow battery technology, the DOE stated that “while lithium-ion batteries are commonly used in electric vehicles and portable devices for various applications, flow batteries are particularly well-suited for grid storage needs.”  The DOE aims to incentivize development of scalable and cost-effective “mid-sized” flow battery systems (between 10 to 100kWh).  This funding opportunity follows several other recent announcements supporting the growth of energy storage, including the DOE’s Energy Storage Grand Challenge, a Department-wide program to accelerate the development, commercialization, and utilization of next-generation energy storage technologies and sustain American global leadership in energy storage, and a recently proposed Federal Bill to introduce a federal tax credit for energy storage, similar to those available to solar and wind projects.

Tagged:  DOE, Department of Energy, Energy Storage Grand Challenge, battery storage

Enterprise Products Signs Power Purchase Agreement with EDF Renewables for Texas Project to Expand Use of Solar Power

In another sign of various sectors of the energy industry coming together to advance decarbonization, Enterprise Products Partners LP, a company focused on pipeline, storage and natural gas processing, among other services and products to the energy industry, signed a virtual power purchase agreement for solar energy from the Space City Solar project located in Wharton County, Texas. “We are committed to being a responsible steward of the environment, including using energy sustainably across our footprint,” A.J. “Jim” Teague, co-CEO of the Houston-based midstream company’s general partner, said in a statement on March 1. The PPA made with EDF Renewables North America is the result, Teague said, of an initiative launched by Enterprise Products in 2020 to expand solar power purchasing and/or installations across its system. “We estimate that by 2025, approximately 25% of our power will be from renewable resources.” The Space City Solar project is expected to commence construction in Summer 2021 and begin delivery of clean electricity in Summer 2022. The power purchase agreement between EDF Renewables and an affiliate of Enterprise Products was for a second tranche of the project for 100 MWac/132 MWdc. The project’s total capacity is up to 345 MWac/455 MWdc.  Approximately 300 jobs are expected to be created during the construction phase with more than $30 million generated in new tax revenue over the operating life for Wharton County taxing entities, according to a joint release from Enterprise and EDF. EDF Renewables North America Signs Virtual Power Purchase Agreement with Enterprise Products for Solar Energy | Business Wire

Tagged:  Enterprise Products Partners LP, Virtual Power Purchase Agreement, renewable, solar

American Jobs in Energy Manufacturing Act of 2021 Proposes $8 Billion in Tax Credits to Retool, Expand, or Build New Manufacturing Facilities

Democratic Senators from West Virginia (Joe Manchin) and Michigan (Debbie Stabenow) have introduced legislation to make billions of dollars available to promote manufacturing related to energy efficiency and renewable energy.  According to a press release, the proposed “American Jobs in Energy Manufacturing Act of 2021” would provide up to $8 billion in tax credits to “manufacturers and other industrial users to retool, expand, or build new facilities that make or recycle energy-related products.”  Half of those credits are designated for communities adversely affected by closures of coal mines or power plants that have not previously received similar tax credits.  Under the proposed bill, credits are available for new construction or retrofitting of existing facilities to produce or recycle a range of energy products including:
  • advance electric grid, energy storage, and fuel cell equipment;
  • equipment for production of low-carbon, low emission fuels, chemicals and other products;
  • renewable energy and energy efficiency equipment;
  • products or technologies that capture, remove, use, or store carbon dioxide; and
  • advanced vehicles, components, and related infrastructure.
The bill is intended to promote creation of domestic jobs that draw on skills possessed by individuals formerly employed in manufacturing, coal mining, or power plant operation.  The bill also seeks to promote investment in communities experiencing high unemployment due to coal mine or power plant closures.

Tagged:  Energy Manufacturing Act of 2021, Manufacturing, energy, tax credits

Biden Administration to Revoke Proposed Amendments to the Desert Renewable Energy Conservation Plan

On February 17, 2021, the Biden Administration announced it will revoke amendments to the Desert Renewable Energy Conservation Plan (DRECP) filed during the last days of the Trump Administration.  The DRECP was a collaborative, interagency planning effort finalized in 2016 that was intended to balance renewable energy development and desert conservation across nearly 11 million acres of public lands in the deserts of California.  The DRECP carves out certain areas of the deserts for renewable energy development, and makes other areas off limits for reasons including conservation and recreation.  The Trump Administration’s amendments would have reduced the number of areas where renewable energy development was off limits, opening up an additional 800,000 acres for renewable energy development.  In a statement from the Bureau of Land Management, it was unnecessary to reopen and reconsider the DRECP, which had been developed after years of collaboration and stakeholder input.  Renewable energy development in the DRECP land area will continue on under the original plan.

Tagged:  Bureau of Land Management, DRECP, Desert Renewable Energy Conservation Plan, renewable

FERC Forecasting a Boost to Transmission Infrastructure

On February 11, 2021, FERC Chairman Richard Glick discussed plans to develop new incentives to support the buildout of transmission infrastructure to meet the ever-growing demand for electricity and the continued growth of renewable projects across the country.  As states issue long term net-zero and renewable energy policy goals, and in turn incentivize development of additional power generation facilities, upgrades and construction of new transmission infrastructure will be needed to carry forth that driving force.  Chairman Glick provided that "We do have a duty to figure out where the industry is going and recognize the fact that there is going to be a lot more demand for electricity." "I think we have to figure out policies that will hopefully promote greater investment in the transmission grid to facilitate access to cleaner resources." For additional information on Chairman Glick’s policy forecast, please click here.

Tagged:  FERC, electricity, renewable, transmission infrastructure

Solar Developer Settles Massachusetts Enforcement Action

A recently settled enforcement action against a solar project developer in Massachusetts underscores the importance of adhering to appropriate stormwater pollution prevention protocols when siting, designing and constructing a project. The Commonwealth of Massachusetts sued the project developer under state and federal environmental laws, alleging that they had constructed a solar array on a hillside parcel without designing or implementing the required stormwater controls.  Specifically, the Commonwealth alleged that the developer never properly analyzed the potential for harm from stormwater discharges resulting from construction of the solar array, failed to install necessary stormwater controls prior to conducting site clearing and grading activities, applied for a General Stormwater Permit for construction activities (Permit) without having first prepared a Stormwater Pollution Prevention Plan (SWPPP), and ultimately failed to comply with requirements of the Permit and SWPPP that are designed to prevent stormwater pollution.  As a result, the Commonwealth claimed, there was an extensive discharge of sediment-laden stormwater over several months into a downgradient river that adversely affected the river’s water quality, and also eroded the hillside, scoured out perennial and intermittent streams, uprooted trees, destroyed streambeds, and filled in wetlands with sediment.  The developer has agreed to pay more than $1 million to settle the claim, which includes the cost of restoring impacted natural resources, compensatory mitigation costs, the Commonwealth’s legal fees, and a $100,000 civil penalty. The case is an important reminder that renewables projects face the same environmental compliance obligations as any other large-scale infrastructure project, and that such projects, while considered “green,” are not immune from environmental enforcement actions. While renewables projects are often scrutinized for potential impacts to protected species, a greater risk of liability may lie in a project’s failure to comply with more “run of the mill” permitting and compliance requirements.  For more information on this case, please click here.

Tagged:  SWPPP, Stormwater Pollution Prevention Plan, enforcement action, solar, stormwater

Solar Growth in West Virginia

Following the passage of West Virginia Senate Bill 583 in early 2020, West Virginia has seen an uptick in the number of new proposed renewable energy projects.  SB 583 established a new incentive program supporting the development of renewable energy facilities on former industrial sites.  Berkeley County, in the eastern panhandle, recently announced a proposed 100 MW solar facility to be built on a 750 acre brownfield site previously used as a manufacturing facility.  Read more.

Tagged:  West Virginia Senate Bill 583, energy, renewable, solar, tax credits

Solar Investment and Wind Production Tax Credits Extended

The recently approved federal spending bill for 2021 appropriations (December 27, 2020) included extensions to the federal solar investment tax credit (ITC) and wind production tax credit (PTC).  The ITC and PTC provide significant financial incentives to the growing renewable energy industry. The ITC is a tax credit that can be claimed on federal corporate income taxes for a percent of the cost of a solar photovoltaic (PV) system that is placed in service.  The ITC, which was scheduled to step down from 26% to 22% in 2021, has been extended at its current 26% rate for an additional two years through 2023.  The PTC is a per-kilowatt-hour (kWh) tax credit for electricity generated using qualified energy resources including wind, and was scheduled to phase down from 60% of the original credit to 40% in 2021.  The new spending bill included an extension of the 60% rate for an additional year through 2021. Projects must be commenced prior to the expiration of the new extension deadlines in order to qualify for the current tax credit rate. Please click here for more information.

Tagged:  ITC, PTC, energy, federal solar investment tax credit, federal spending bill, renewable, solar, tax credits, wind, wind production tax credit