Energy Storage for Grid Resilience and Modernization Act of 2016 or the Energy Storage Act of 2016
This bill amends the Internal Revenue Code to: (1) allow, through 2026, a 30% energy tax credit for investment in energy storage property capable of absorbing energy, storing the energy for a period of time, and dispatching the energy for specified purposes; (2) make energy storage property owned by a public power provider, a governmental body, or a cooperative electric company eligible for new clean renewable energy bond financing; and (3) allow, through 2026, a 30% nonbusiness energy property tax credit for residential energy storage equipment expenditures for a taxpayer's principal residence.
[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5350 Introduced in House (IH)]
<DOC>
114th CONGRESS
2d Session
H. R. 5350
To amend the Internal Revenue Code of 1986 to provide for an energy
investment credit for energy storage property connected to the grid,
and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 26, 2016
Mr. Honda (for himself, Mr. Reed, Mr. Gibson, and Mr. Takano)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for an energy
investment credit for energy storage property connected to the grid,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Energy Storage for Grid Resilience
and Modernization Act of 2016'' or the ``Energy Storage Act of 2016''.
SEC. 2. ENERGY INVESTMENT CREDIT FOR ENERGY STORAGE PROPERTY CONNECTED
TO THE GRID.
(a) 30-Percent Credit Allowed.--Clause (i) of section 48(a)(2)(A)
of the Internal Revenue Code of 1986 is amended by striking ``and'' at
the end of subclause (III) and by adding at the end the following new
subclause:
``(V) qualified energy storage property,
and''.
(b) Qualified Energy Storage Property.--Subsection (c) of section
48 of such Code is amended by adding at the end the following new
paragraph:
``(5) Qualified energy storage property.--
``(A) In general.--The term `qualified energy
storage property' means property described in
subparagraph (B) that is capable of absorbing energy,
storing such energy for a period of time, and
thereafter dispatching such energy for the purposes
of--
``(i) reducing demand for peak electrical
generation,
``(ii) deferring or substituting for an
investment in generation, transmission, or
distribution assets,
``(iii) providing back up energy for
variable generation sources,
``(iv) improving the reliable operation of
the electrical transmission or distribution
grid,
``(v) enabling management of end-user
energy consumption, or
``(vi) enabling the disconnection of a load
from the main grid.
``(B) Storage and use of energy.--Property is
described in this subparagraph if the property, whether
centralized or distributed--
``(i) uses mechanical, chemical, thermal,
or electrostatic processes to store energy that
was generated at one time for use at a later
time,
``(ii) stores thermal energy for direct use
for heating or cooling at a later time in a
manner that avoids the need to use electricity
at that later time,
``(iii) uses mechanical, chemical, thermal,
or electrostatic processes to store electricity
generated from renewable resources for use at a
later time, or
``(iv) uses mechanical, chemical, thermal,
or electrostatic processes to store, for
delivery at a later time, energy generated from
mechanical processes that would otherwise be
wasted.
``(C) Special rule for onsite energy storage.--
``(i) In general.--Property which performs
its purpose primarily for onsite consumption
shall not be treated as qualified energy
storage property unless such property in
aggregate--
``(I) has the ability to store the
energy equivalent of at least 5
kilowatt hours of energy, and
``(II) has the ability to have an
output of the energy equivalent of 1
kilowatt of electricity for a period of
5 hours.
``(ii) Limitation.--In the case of
qualified energy storage property described in
clause (i) that is placed in service during the
taxable year, the credit otherwise determined
under subsection (a) for such year with respect
to such property shall not exceed $1,000,000.
``(D) Allocation of credits.--
``(i) In general.--In the case of qualified
energy storage property placed in service
during the taxable year, the credit otherwise
determined under subsection (a) for such year
with respect to such property shall not exceed
the amount allocated to such project under
clause (ii).
``(ii) National limitation and
allocation.--There is a qualified energy
storage property investment credit limitation
of $2,000,000,000. Such limitation shall be
allocated by the Secretary among qualified
energy storage property projects selected by
the Secretary, in consultation with the
Secretary of Energy, for taxable years
beginning after the date of the enactment of
the Energy Storage for Grid Resilience and
Modernization Act of 2016, except that not more
than $40,000,000 shall be allocated to any
project for all such taxable years.
``(iii) Selection criteria.--In making
allocations under clause (ii), the Secretary,
in consultation with the Secretary of Energy,
shall select only those projects which have a
reasonable expectation of commercial viability,
select projects representing a variety of
technologies, applications, and project sizes,
and give priority to projects--
``(I) which provide the greatest
increase in reliability or the greatest
economic benefit,
``(II) which enable the greatest
improvement in integration of renewable
resources into the grid,
``(III) which enable the greatest
increase in efficiency in operation of
the grid, or
``(IV) the owner of which has not
received an allocation under this
paragraph for energy storage property
for a different project.
``(iv) Deadlines.--
``(I) In general.--If a project
which receives an allocation under
clause (ii) has not commenced
construction within 2 years after the
date of such allocation, such
allocation shall be invalid.
``(II) Special rule for
hydroelectric pumped storage.--
Notwithstanding subclause (I), in the
case of a hydroelectric pumped storage
project, if such project has not
received such permits or licenses as
are determined necessary by the
Secretary, in consultation with the
Secretary of Energy, within 3 years
after the date of such allocation,
begun construction within 5 years after
the date of such allocation, and been
placed in service within 8 years after
the date of such allocation, such
allocation shall be invalid.
``(III) Special rule for compressed
air energy storage.--Notwithstanding
subclause (I), in the case of a
compressed air energy storage project,
if such project has not begun
construction within 3 years after the
date of the allocation and been placed
in service within 5 years after the
date of such allocation, such
allocation shall be invalid.
``(IV) Exceptions.--The Secretary
may extend the 2-year period in
subclause (I) or the periods described
in subclauses (II) and (III) on a
project-by-project basis if the
Secretary, in consultation with the
Secretary of Energy, determines that
there has been a good faith effort to
begin construction or to place the
project in service, whichever is
applicable, and that any delay is
caused by factors not in the taxpayer's
control.
``(E) Review and redistribution.--
``(i) Review.--Not later than 4 years after
the date of the enactment of the Energy Storage
for Grid Resilience and Modernization Act of
2016, the Secretary shall review the credits
allocated under subparagraph (D) as of the date
of such review.
``(ii) Redistribution.--Upon the review
described in clause (i), the Secretary may
reallocate credits allocated under subparagraph
(D) if the Secretary determines that--
``(I) there is an insufficient
quantity of qualifying applications for
certification pending at the time of
the review, or
``(II) any allocation made under
subparagraph (D)(ii) has been revoked
pursuant to subparagraph (D)(iv)
because the project subject to such
allocation has been delayed.
``(F) Disclosure of allocations.--The Secretary
shall, upon making an allocation under subparagraph
(D)(ii), publicly disclose the identity of the
applicant, the location of the project, the energy
storage project size and output, and the amount of the
credit with respect to such applicant.
``(G) Coordination.--
``(i) Denial of double benefit.--The term
`qualified energy storage property' does not
include any property for which a credit is
allowable under any provision of this section
for the taxable year other than by reason of
this paragraph.
``(ii) Special rule for section 45.--The
term `qualified energy storage property' shall
not include any property with respect to which
a credit is allowable under section 45 for the
taxable year or any prior taxable year.
``(H) Termination.--No credit shall be allocated
under subparagraph (D) for any period ending after
December 31, 2026.''.
(c) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, under
rules similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990).
SEC. 3. ENERGY STORAGE PROPERTY CONNECTED TO THE GRID ELIGIBLE FOR NEW
CLEAN RENEWABLE ENERGY BONDS.
(a) In General.--Paragraph (1) of section 54C(d) of the Internal
Revenue Code of 1986 is amended to read as follows:
``(1) Qualified renewable energy facility.--The term
`qualified renewable energy facility' means a facility which
is--
``(A)(i) a qualified facility (as determined under
section 45(d) without regard to paragraphs (8) and (10)
thereof and to any placed in service date), or
``(ii) a qualified energy storage property (as
defined in section 48(c)(5)), and
``(B) owned by a public power provider, a
governmental body, or a cooperative electric
company.''.
(b) Effective Date.--The amendment made by this section shall apply
to obligations issued after the date of the enactment of this Act.
SEC. 4. CREDIT FOR RESIDENTIAL ENERGY STORAGE EQUIPMENT.
(a) Credit Allowed.--Subsection (a) of section 25D of the Internal
Revenue Code of 1986 is amended by striking ``and'' at the end of
paragraph (4), by striking the period at the end of paragraph (5) and
inserting ``, and'', and by adding at the end the following new
paragraph:
``(6) 30 percent of the qualified residential energy
storage equipment expenditures made by the taxpayer during such
taxable year.''.
(b) Qualified Residential Energy Storage Equipment Expenditures.--
Section 25D(d) of such Code is amended by adding at the end the
following new paragraph:
``(6) Qualified residential energy storage equipment
expenditures.--For purposes of this section, the term
`qualified residential energy storage equipment expenditure'
means an expenditure for property--
``(A) which is installed in or on a dwelling unit
located in the United States and owned and used by the
taxpayer as the taxpayer's principal residence (within
the meaning of section 121), or on property owned by
the taxpayer on which such a dwelling unit is located,
``(B) which--
``(i) provides supplemental energy to
reduce peak energy requirements, or
``(ii) is designed and used primarily to
receive and store, firm, or shape variable
renewable or off-peak energy and to deliver
such energy primarily for onsite consumption,
and
``(C) which--
``(i) has the ability to store the energy
equivalent of at least 5 kilowatt hours of
energy, and
``(ii) has the ability to have an output of
the energy equivalent of 1 kilowatt of
electricity for a period of 4 hours.''.
(c) Termination.--Section 25D(g) of such Code is amended by
inserting ``(December 31, 2026, in the case of property described in
subsection (d)(6))'' after ``December 31, 2016''.
(d) Effective Date.--The amendments made by this section shall
apply to property placed in service after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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