Maryland is first state to launch energy storage tax credit
- The Maryland Energy Administration (MEA) is accepting applications for its 2018 Energy Storage Tax Credit Program, which offers up to $750,000 to residential and commercial customers who install qualified systems.
- The incentive reimburses 30% of the total installation costs, up to $5,000 for a residential project and $75,000 for commercial. A total of $225,000 dollars has been allocated for residential taxpayers and $525,000 dollars for commercial.
- Maryland officials say the tax credit is the first like it in the nation and can serve as a model to other states. Other states have been working to create incentives, including California, New Jersey and Nevada.
Maryland passed legislation last year authorizing its energy storage incentive, but has only now formally launched. The rules include several technologies, flexibility in how funds are distributed, and specify what use cases the systems will address.
MEA Director Mary Beth Tung said the "first in the nation, energy storage tax credit ... empowers all Marylanders to support grid resiliency and serves as a model for all other 49 states.”
The cost of energy storage is expected to continue falling and widespread deployment could be used to maintain grid reliability.
Brett Simon, an energy analyst at GTM Research, told Utility Dive last year that “it's probably fair to call this incentive push a trend, as we've now got at least five states either discussing or implementing these sorts of bills, and I wouldn't be surprised if more follow."
MEA says the tax credit program is designed to provoke interest in the burgeoning energy storage market in Maryland and will be available to projects installed in 2018. The agency will award up to $750,000 dollars in energy storage tax credits on a first come, first served basis while funding is available.
The state has added some flexibility to how the projects are selected, a nod to the uncertainty in a first-of-its-kind program.
Of the total funding, $225,000 has been reserved for residential systems and $525,000 for commercial. However, if either of the tranches become oversubscribed, eligible applicants will be placed onto a waitlist as long as resources remains in the other financial reserve. The funding categories will be dropped after Oct. 1, and the tax credits will be assigned to eligible applicants on the waitlist. A spot on the waitlist will not carry over into 2019.
The rules specify that projects can store electrical energy: mechanical and chemical including electrochemical energy, in addition to thermal energy that "was once electrical energy." The rules also say all storage systems must store energy either for use as electrical energy at a later date or in a process that offsets electricity use at peak times.
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