The U.S. needs a storage ITC to reach carbon-free electricity goals

The United States needs energy storage to reach the carbon-free electricity goals necessary to curb the worst effects of climate change. Storage technologies make renewables dispatchable like fossil fuels, yet they’re still not in abundant use.

“We are seeing significant demand for solar paired with energy storage across the United States for use-cases such as firming, shaping, minimizing curtailment risk and enabling the solar to look more like baseload power,” said Josh Rogol, chief development officer at Strata Solar, in an email.

One reason adoption of storage hasn’t exploded yet is the lack of a federal tax credit to reduce the cost of deployment. Currently, storage must be paired with solar to receive an ITC. Further, a battery can only take advantage of the solar ITC if it is at least 75% charged directly from the PV asset it’s paired with for five years. That means the paired batteries cannot perform many of the additional demand arbitrage functions they’re capable of, lest they forfeit the ITC.

“The structure of the investment tax credit today drives technology and design decisions that often lead to suboptimal technical and financial structuring that could be ameliorated by broadening the ITC eligibility, specifically by eliminating the need for the [battery] to be charged by PV during the five-year ITC recapture period,” Rogol said.

Read the full story at solarpowerworldonline.com