A National First: Md. Legislature Passes Energy Storage Tax Credits

Posted by Joseph Bebon on April 17, 2017 1 Comment
Categories : Featured, Policy Watch

“Maryland is charging ahead!” proclaims the Energy Storage Alliance (ESA). In an announcement, the ESA says the Maryland legislature recently passed a bill that will make Maryland the first state in the country to establish a dedicated tax credit for the installation of energy storage systems.

The bill, S.B.758, has gone to Gov. Larry Hogan for consideration, but given that it overwhelmingly passed the House of Delegates in a 101-11 vote and passed unanimously in the Senate, it appears veto-proof. Once implemented, the legislation will allow residents and businesses to cash in on state income tax credits that cover up to 30% of the total installed cost of an energy storage system. According to the bill text, the incentives will be capped at $5,000 for residential systems and $75,000 for commercial ones, and the credits will be available for systems installed from 2018 through the end of 2022. Overall, the incentive program will have a funding cap of $750,000 each year.

“Over the next five years, Maryland will play a significant role in the advancement of the energy storage industry,” says the ESA in its announcement. “Once enacted, this law is expected to directly spur more than 10,000 kilowatt-hours of customer-sited energy storage systems and will be paired with private-sector and homeowner investments.”

Furthermore, Maryland lawmakers have also passed H.B.773, legislation to kick off a study of “regulatory reforms and market incentives that may be necessary or beneficial to increase the use of energy storage devices in the state” and make final recommendations to legislators before the end of 2018, according to the bill text.

“These two actions are a big win for Maryland’s advanced energy industry and open a path for the state to become a leader in the energy storage industry,” says the ESA in its announcement. “These efforts will not only support the deployment of hundreds of energy storage systems to help Maryland households and businesses lower their utility bills, but also will enable those buildings to relieve stress on the electric grid and be resilient to service disruptions.”

Although some other states – such as California and, more recently, Massachusetts – have turned to mandates in order to help boost energy storage deployment, Maryland is poised to be the first to offer a tax credit as an incentive to potential storage adopters. Solar and wind power tax credits have proven successful at both the state and federal levels, but efforts to pass a federal tax credit for energy storage have so far been unsuccessful.

Maryland has taken “a historic step,” according to the ESA.

Comments

  1. Sounds like 10 Commercial systems installed in a year could use up the credits in each year. Commercial systems make the most sense because they use the most energy and should manage it well.

    Residential systems would usually go into homes of wealthy people who aspire to lower their grid demand and “go green”. Using tax credits instead of rebates keeps these advances away from lower-income families. Just as the national tax credit for EVs did.

    The numbers are “too rounded to five-fingers”. 5000 for homes and 75000 for businesses? Who comes up with these numbers? A home battery can be as low as $5000 per install so I hope this is limited to a percentage of the install price.

    Reminder is that GA had a rebate of $5000 per EV purchase *or* leased a few years ago. Nissan Leaf lessees were taking home $5000 rebates on 2-year leases, which was not sustainable. Think through these programs on a value-returned basis and not the numbers of fingers on a hand.

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