While President Trump’s position suggests the US is doing very little to support decarbonization of its electrical grid, there are political changes afoot constantly, including a handful of political moves this week.
Tax credits are being proposed on energy storage devices in the US for the first time, and Congress is looking once again at extending the tax credits on solar and renewable energy out past 2021, while a bipartisan group of US lawmakers introduced legislation to expand tax credits on electric vehicles (EVs) to the first 400,000 vehicles per manufacturer, up from 200,000. All of this runs counter to President Trump’s election promises.
Political commentators see the energy storage bill more as a placeholder for the next administration and do not see it passing in the run up to an election, but it may be early on the agenda of the next administration. However if it does go through, it is seen as extending the 30% tax break for solar to the batteries it can work with, and although both may die in 2021 as things stand, a 10% tax break for enterprises would survive, so that major corporations could add batteries to their own renewable efforts.
Of course if the extension to tax credits also goes through, energy storage may be part and parcel of this by then and it could move out to the end of the next administration circa 2025.
Solar power in the home is something that seems to suit the independent nature of Americans, and several million homes there have their own solar storage. The National Renewable Energy Laboratory (NREL) said recently that the falling cost of solar will lead to 971 GW of solar capacity nationwide, by 2050 which is optimistic from just 50 GW today, 80% of which is home solar.
This year’s bill would grant eligibility of full tax credits on investments in commercial, residential and utility energy storage, which are set to be at 30% this year, 26% during 2020 and 22% during 2021.
One of the reasons for the energy storage bill is that while some batteries have been given the tax benefits in the past this has been limited to those where the batteries are charged solely from solar. And the truth is that the best way to use grid attached batteries is to use them for multiple reasons at once, including enhancing grid stability, although this would not apply to home based batteries.
Back in 2015 there was an extension to US tax credits for renewables until 2021 in a close vote at the time and since Trump has been in office, no-one has dared bring the thing back to the table again. The truth is that Solar and Wind are both cheap enough now to stand on their own two feet, and in markets across Europe, subsidy free renewables have just come into the picture, showing that the time for subsidies is probably over. If tax incentives were the main reason for renewables installations, you would expect them to have hit a wall in Europe, whereas they look ready to overtake 2018 numbers already.
This latest move to extend the tax credits comes in the form of a letter to the Democratic leadership of the House Ways and Means Committee to consider extending the credits, especially in light of the EPA’s likely abandonment of its
Clean Power Plan.
Finally the EV tax credit, worth $7,500 a car, will if passed allow taxpayers to deduct part of the cost of buying an electric car, takes buyers up to the first 200,000 swales of EVs each year and the new “Driving America Forward Act” –would extend this up to 400,000 vehicles. At present Tesla and General Motors have hit the cap easily over the last two years. It is perhaps seen as a response to the White House’s proposal to end this credit entirely.
Lastly we note that Ohio has just drafted legislation that would see subsidies for its existing nuclear sources of energy, taking the money from
renewable energy and efficiency subsidies and instead putting $300 million a year on electricity bills to prevent nuclear plants from closing down. This is the first state that has gone backwards on the acceptance of renewables to date and making consumers pay for it adding $2.50 to everyone’s bills, but other states reliant on the jobs in nuclear are believed also to be considering it.